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ON Semiconductor
(NASDAQ:ON)
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Rating:63Neutral
Price Target:
$97.00
▲(16.85% Upside)
Action:Downgraded
Date:06/27/26
The score is supported primarily by solid financial performance—especially strong cash generation and manageable leverage—and a constructive earnings outlook calling for sequential margin expansion and faster AI-related growth. Offsetting these strengths are weak technicals (price below key short-term moving averages with subdued momentum) and a demanding valuation (high P/E with no dividend yield provided), with additional execution risk from major corporate actions like the Synaptics deal and equity-linked financing.
Positive Factors
Strong cash generation
Persistent operating cash flow and free cash flow above net income indicate high earnings quality and durable cash conversion. This supports capital deployment for R&D, conservative capex, buybacks and M&A, reducing reliance on external funding and improving long-term financial flexibility.
Negative Factors
Modest returns and revenue cyclicality
A lower ROE versus prior peak years and evidence of cyclical revenue declines point to constrained profitability and capital efficiency. In cyclic industries this implies earnings and return volatility, limiting structural improvement unless mix and operating leverage sustainably advance.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Persistent operating cash flow and free cash flow above net income indicate high earnings quality and durable cash conversion. This supports capital deployment for R&D, conservative capex, buybacks and M&A, reducing reliance on external funding and improving long-term financial flexibility.
Read all positive factors
ON Semiconductor Key Performance Indicators (KPIs)
Any
Revenue by End Market
Shows revenue distribution across various end markets, offering a view of the company's exposure to different industries and potential shifts in demand.
Shows revenue distribution across various end markets, offering a view of the company's exposure to different industries and potential shifts in demand.
Data provided by:
The Fly
The FlyON Semiconductor (ON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$36.83B
Dividend YieldN/A
Average Volume (3M)12.32M
Price to Earnings (P/E)67.1
Beta (1Y)1.85
Revenue Growth-9.04%
EPS Growth-4.21%
CountryUS
Employees26,400
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.41
Shares Outstanding389,185,600
10 Day Avg. Volume13,403,058
30 Day Avg. Volume12,323,993
Financial Highlights & Ratios
PEG Ratio-2.03
Price to Book (P/B)2.90
Price to Sales (P/S)3.71
P/FCF Ratio15.69
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue7.46
Enterprise Value/Gross Profit20.06
Enterprise Value/Ebitda37.21
Forecast
1Y Price Target
$115.15Price Target Upside38.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering24
EPS Forecast (FY)3.08
Revenue Forecast (FY)$6.47B
ON Semiconductor Business Overview & Revenue Model
Company Description
ON Semiconductor Corporation operates as a global provider of sophisticated power and sensing solutions. Their cutting-edge power innovations are pivotal in modernizing various sectors: they contribute to the development of lighter, extended-range...
How the Company Makes Money
onsemi primarily makes money by selling semiconductor devices and related solutions to original equipment manufacturers (OEMs) and their supply chains (including contract manufacturers and distributors). Revenue is generated from product sales acr...
ON Semiconductor Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 03, 2026
Earnings Call Sentiment Positive
The call highlights a clear inflection with accelerating AI data center revenue (>30% QoQ; expected to double YoY in 2026), a strong Treo ramp (2.5x sequential growth), continued gross margin expansion to 38.5%, solid liquidity and aggressive shareholder returns. Offsetting these positives are one-time and GAAP-level restructuring charges, planned non-core exits (~$300M annualized), mixed unit-level performance (AMG and ISG declines QoQ), elevated inventory days, and near-term input-cost pressure and lead-time dynamics. Overall, the company presented multiple secular growth drivers (AI, Treo, GaN/SiC, energy storage) and improving operating leverage that outweigh the listed near-term challenges.Positive Updates
Revenue and EPS Beat
Q1 revenue of $1.51 billion (above midpoint of guidance); non-GAAP diluted EPS of $0.64 (also above midpoint). Q1 revenue was down 1% QoQ but up 5% YoY.
Negative Updates
GAAP Loss and Restructuring Charges
GAAP operating expenses included $329 million of restructuring expenses leading to GAAP operating margin of negative 3.5% and GAAP diluted loss per share of $0.08 in Q1.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and EPS Beat
Q1 revenue of $1.51 billion (above midpoint of guidance); non-GAAP diluted EPS of $0.64 (also above midpoint). Q1 revenue was down 1% QoQ but up 5% YoY.
Read all positive updates
Company Guidance
ON Semiconductor guided Q2 non‑GAAP revenue of $1.535–$1.635 billion (noting an incremental $30–$40M of non‑core exits; excluding those exits revenue would rise ~7% at the midpoint and be above seasonal), non‑GAAP gross margin of 38%–40% (includes $6M of share‑based comp), non‑GAAP operating expenses of $287–$302M (includes $28M SBC), non‑GAAP other income a net benefit of ~$6M (interest income > interest expense), a non‑GAAP tax rate of ~15%, non‑GAAP diluted share count ~194M, implying non‑GAAP EPS of $0.65–$0.77, and Q2 capex of $25–$35M; management also said Q1 utilization was 77% (Q2 flat to slightly up), expects sequential gross‑ and operating‑margin expansion throughout 2026, has line of sight to exiting roughly $300M of non‑core revenue in 2026 (including ~$50M in Q1 plus the Q2 exits), and reiterated that AI data‑center revenue should double year‑over‑year in 2026; balance‑sheet liquidity noted: cash & short‑term investments ≈$2.44B and total liquidity ≈$3.9B (≈$1.5B undrawn revolver).ON Semiconductor Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
74
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.06B | 6.00B | 7.08B | 8.25B | 8.33B | 6.74B |
| Gross Profit | 2.26B | 1.94B | 3.22B | 3.88B | 4.08B | 2.71B |
| EBITDA | 1.22B | 888.20M | 2.54B | 3.22B | 3.01B | 1.88B |
| Net Income | 573.70M | 121.00M | 1.57B | 2.18B | 1.90B | 1.01B |
Balance Sheet | ||||||
| Total Assets | 12.01B | 12.52B | 14.09B | 13.22B | 11.98B | 9.63B |
| Cash, Cash Equivalents and Short-Term Investments | 2.40B | 2.55B | 2.99B | 2.48B | 2.92B | 1.35B |
| Total Debt | 3.01B | 3.47B | 3.37B | 3.36B | 3.23B | 3.10B |
| Total Liabilities | 4.69B | 4.83B | 5.28B | 5.41B | 5.77B | 5.02B |
| Stockholders Equity | 7.30B | 7.67B | 8.80B | 7.78B | 6.19B | 4.59B |
Cash Flow | ||||||
| Free Cash Flow | 1.45B | 1.42B | 1.21B | 438.40M | 1.60B | 1.29B |
| Operating Cash Flow | 1.40B | 1.76B | 1.91B | 1.98B | 2.63B | 1.78B |
| Investing Cash Flow | -340.30M | -538.50M | -1.01B | -1.74B | -705.40M | -915.10M |
| Financing Cash Flow | -1.81B | -1.76B | -683.80M | -686.50M | -370.00M | -569.40M |
ON Semiconductor Technical Analysis
Neutral
83.01
Price Trends
110.61
Negative
88.13
Positive
70.83
Positive
Market Momentum
-4.03
Positive
40.48
Neutral
13.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ON, the sentiment is Neutral. The current price of 83.01 is below the 20-day moving average (MA) of 114.70, below the 50-day MA of 110.61, and above the 200-day MA of 70.83, indicating a neutral trend. The MACD of -4.03 indicates Positive momentum. The RSI at 40.48 is Neutral, neither overbought nor oversold. The STOCH value of 13.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ON.
ON Semiconductor Risk Analysis
ON Semiconductor disclosed 40 risk factors in its most recent earnings report. ON Semiconductor reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ON Semiconductor Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
88 Outperform | $4.78T | 30.12 | 111.66% | 0.02% | 70.68% | 109.57% | |
71 Outperform | $66.70B | 42.14 | 13.50% | 6.06% | 7.52% | 17.94% | |
69 Neutral | $42.38B | 54.77 | 6.66% | ― | 0.80% | ― | |
63 Neutral | $36.83B | 67.11 | 7.45% | ― | -9.04% | -4.21% | |
62 Neutral | $96.80B | 64.79 | 14.45% | 2.29% | 15.55% | 43.35% | |
62 Neutral | $63.36B | 418.09 | 0.86% | 1.28% | 0.79% | -86.68% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ON
ON Semiconductor
94.63
38.68
69.13%
ASX
ASE Technology Holding Co
42.99
32.69
317.38%
NVDA
Nvidia
197.58
40.54
25.82%
STM
STMicroelectronics
70.72
39.30
125.10%
UMC
United Micro
25.71
17.85
227.10%
GFS
GlobalFoundries Inc
77.23
37.74
95.55%
ON Semiconductor Corporate Events
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesM&A Transactions
ON Semiconductor to Acquire Synaptics in All-Stock Deal
Positive
Jun 25, 2026
On June 25, 2026, onsemi agreed to acquire Synaptics in an all‑stock deal valuing the target at about $7 billion, with Synaptics investors to receive 1.350 onsemi shares per Synaptics share and own roughly 12% of the combined company. The tr...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
ON Semiconductor Extends Executive Tenure, Shareholders Back Governance
Positive
May 18, 2026
ON Semiconductor’s former Power Solutions Group president, Simon Keeton, had previously stepped down from all officer roles effective March 9, 2026, with his final employment date initially expected on June 30, 2026. On May 14, 2026, the com...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
ON Semiconductor Issues 0% Convertible Notes for Capital Flexibility
Positive
May 12, 2026
On May 11, 2026, ON Semiconductor completed a private, unregistered offering of $1.5 billion in 0% convertible senior notes due 2031, fully guaranteed by certain U.S. subsidiaries and structured to mature on May 1, 2031 unless earlier converted, r...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
ON Semiconductor Prices $1.3 Billion Convertible Notes Offering
Positive
May 7, 2026
On May 6, 2026, onsemi priced a private offering of $1.3 billion in 0% Convertible Senior Notes due 2031, sold to qualified institutional buyers at a conversion premium of about 52.5% over its then share price. The issuance, which may increase by ...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
onsemi Announces $1.3 Billion Convertible Notes Offering
Neutral
May 6, 2026
On May 6, 2026, onsemi announced it was launching a private offering of $1.3 billion in Convertible Senior Notes due 2031, with an option for initial purchasers to buy up to an additional $200 million, in a Rule 144A transaction for qualified inst...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.