ON Semiconductor (ON) AI Stock Analysis

• Market Cap: $22.17B
• Dividend Yield: N/A
• Average Volume (3M): 8.86M
• Price to Earnings (P/E): 73.0
• Beta (1Y): 1.78
• Revenue Growth: -16.13%
• EPS Growth: -81.06%
• Country: US
• Employees: 26,400
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.63
• Shares Outstanding: 402,378,420
• 10 Day Avg. Volume: 7,452,936
• 30 Day Avg. Volume: 8,862,067
• PEG Ratio: -0.62
• Price to Book (P/B): 3.06
• Price to Sales (P/S): 3.80
• P/FCF Ratio: 22.23
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 3.37
• Enterprise Value/Gross Profit: 9.44
• Enterprise Value/Ebitda: 19.64
• 1Y Price Target: $59.06
• Price Target Upside: 7.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $61.00 ▲(10.99% Upside)

ON Semiconductor's overall score is driven by strong technical indicators and robust cash flow management, despite challenges in revenue growth and profitability. The high P/E ratio suggests overvaluation, while strategic acquisitions and technological advancements provide long-term growth potential. Regional revenue declines and asset impairments are notable risks.

Positive Factors

Strategic Acquisitions

Strategic acquisitions enhance ON Semiconductor's power management portfolio, supporting growth in AI and data center markets.

Cash Flow Management

Effective cash management and robust cash generation support future investments and debt servicing, strengthening financial stability.

Technological Innovations

Innovations in power solutions demonstrate ON Semiconductor's leadership in R&D, enhancing competitive advantage and market position.

Negative Factors

Revenue Decline

Declining revenue and profitability indicate challenges in market demand and competitive pressures, impacting long-term growth potential.

Asset Impairments

Significant asset impairments suggest operational inefficiencies and potential future cost burdens, affecting financial performance.

Geopolitical and Macroeconomic Uncertainties

Uncertainties in global markets can disrupt supply chains and demand, posing risks to revenue stability and strategic planning.

ON Semiconductor Business Overview & Revenue Model

Company Description

ON Semiconductor Corporation provides intelligent sensing and power solutions worldwide. Its intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems. The company operates through three segments the Power Solutions Group, the Advanced Solutions Group, and the Intelligent Sensing Group segments. It offers analog, discrete, module, and integrated semiconductor products that perform multiple application functions, including power switching and conversion, signal conditioning, circuit protection, signal amplification, and voltage regulation functions. The company also designs and develops analog, mixed-signal, advanced logic, application specific standard product and ASICs, radio frequency, and integrated power solutions for end-users in end-markets, as well as provides foundry and design services for government customers. In addition, it develops complementary metal oxide semiconductor image sensors, image signal processors, and single photon detectors, including silicon photomultipliers and single photon avalanche diode arrays, as well as actuator drivers for autofocus and image stabilization for a broad base of end-users in various end-markets. ON Semiconductor Corporation was incorporated in 1992 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

ON Semiconductor generates revenue primarily through the sale of its semiconductor products. The company's revenue model is based on the production and distribution of a diverse portfolio of semiconductor solutions, which includes power management ICs, sensors, and custom chips for specific applications. Key revenue streams include sales to automotive customers, which are increasingly adopting advanced semiconductor technologies for electric and autonomous vehicles, as well as industrial and consumer electronics sectors. Significant partnerships with major manufacturers and technology firms enhance ON's market presence and facilitate growth. Additionally, the company benefits from economies of scale and a strong focus on R&D, allowing it to maintain competitive pricing and innovate new products that meet market demands.

ON Semiconductor Financial Statement Overview

Summary

ON Semiconductor shows mixed financial performance with declining revenue and profitability, as indicated by reduced margins and negative revenue growth. However, the company maintains a solid balance sheet with moderate leverage and strong cash flow generation, positioning it well for future growth opportunities.

Income Statement

ON Semiconductor's income statement shows a decline in revenue and profitability in the TTM period, with a negative revenue growth rate of -3.3%. Gross profit margin decreased to 37.2% from 44.8% in the previous year, and net profit margin fell to 7.3% from 22.2%. The EBIT and EBITDA margins also saw significant declines. Despite these challenges, the company maintains a positive net income, indicating resilience in a challenging market environment.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.42, indicating moderate leverage. The return on equity (ROE) decreased to 5.6% in the TTM period from 17.9% in the previous year, suggesting reduced profitability. However, the equity ratio remains healthy, showcasing a strong capital structure with stockholders' equity covering a significant portion of total assets.

Cash Flow

Cash flow analysis reveals strong free cash flow growth of 27.4% in the TTM period, highlighting effective cash management. The operating cash flow to net income ratio is 1.45, indicating robust cash generation relative to net income. The free cash flow to net income ratio of 0.70 further underscores the company's ability to convert earnings into cash, supporting future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.19B	7.08B	8.25B	8.33B	6.74B	5.25B
Gross Profit	2.21B	3.22B	3.88B	4.08B	2.71B	1.72B
EBITDA	1.06B	2.54B	3.22B	3.01B	1.88B	970.10M
Net Income	319.10M	1.57B	2.18B	1.90B	1.01B	234.20M
Balance Sheet
Total Assets	13.01B	14.09B	13.22B	11.98B	9.63B	8.67B
Cash, Cash Equivalents and Short-Term Investments	2.87B	2.99B	2.48B	2.92B	1.35B	1.08B
Total Debt	3.63B	3.37B	3.36B	3.23B	3.10B	3.49B
Total Liabilities	5.08B	5.28B	5.41B	5.77B	5.02B	5.11B
Stockholders Equity	7.91B	8.80B	7.78B	6.19B	4.59B	3.54B
Cash Flow
Free Cash Flow	1.64B	1.21B	438.40M	1.60B	1.29B	400.70M
Operating Cash Flow	1.78B	1.91B	1.98B	2.63B	1.78B	884.30M
Investing Cash Flow	-639.50M	-1.01B	-1.74B	-705.40M	-915.10M	-453.60M
Financing Cash Flow	-1.14B	-683.80M	-686.50M	-370.00M	-569.40M	-244.00M

ON Semiconductor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 54.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ON, the sentiment is Positive. The current price of 54.96 is above the 20-day moving average (MA) of 50.90, above the 50-day MA of 50.58, and above the 200-day MA of 48.28, indicating a bullish trend. The MACD of 1.79 indicates Negative momentum. The RSI at 59.97 is Neutral, neither overbought nor oversold. The STOCH value of 74.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ON.

ON Semiconductor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVDA	76 Outperform	$4.40T	44.81	107.36%	0.02%	65.22%	58.53%
ON	73 Outperform	$22.17B	73.04	3.87%	―	-16.13%	-81.06%
UMC	71 Outperform	$19.49B	15.30	10.97%	6.14%	5.87%	-20.93%
ASX	69 Neutral	$34.13B	31.62	11.17%	2.26%	8.01%	10.41%
GFS	63 Neutral	$22.46B	―	-0.38%	―	0.25%	-106.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STM	57 Neutral	$23.30B	46.27	3.00%	1.28%	-17.33%	-76.71%

ON Semiconductor Corporate Events

ON Semiconductor Announces Major Asset Impairments

In the first quarter of 2025, onsemi announced restructuring and cost reduction initiatives to realign its manufacturing capacity with anticipated long-term needs. On November 13, 2025, the company approved additional pre-tax non-cash impairment and accelerated depreciation charges of $200 million to $300 million for long-lived assets at certain manufacturing facilities, aiming to reduce recurring depreciation expenses by $10 million to $15 million in 2026.

ON Semiconductor Chair Alan Campbell Announces Retirement

On November 4, 2025, Alan Campbell, the current chair of the board of directors at ON Semiconductor Corporation, announced his retirement effective at the end of his term, just before the 2026 annual meeting of stockholders scheduled for May 14, 2026. To ensure continuity, Thomas L. Deitrich has been appointed to succeed him, pending his renomination and reelection, with the company expressing gratitude for Campbell’s service.

onsemi Acquires Aura Semiconductor’s Vcore Power Technologies

On September 23, 2025, onsemi announced a strategic acquisition agreement with Aura Semiconductor to acquire Vcore power technologies and associated intellectual property licenses. This acquisition aims to enhance onsemi’s power management portfolio, particularly in AI data center applications, by delivering solutions with superior power density and efficiency. The transaction, valued at up to $144 million, is expected to close in the fourth quarter of 2025 and is anticipated to have minimal impact on onsemi’s earnings in the first fiscal year following the close.