ON Semiconductor (ON) AI Stock Analysis

• Market Cap: $27.84B
• Dividend Yield: N/A
• Average Volume (3M): 8.96M
• Price to Earnings (P/E): 204.0
• Beta (1Y): 1.64
• Revenue Growth: -16.13%
• EPS Growth: -81.06%
• Country: US
• Employees: 26,400
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.64
• Shares Outstanding: 394,020,540
• 10 Day Avg. Volume: 9,584,596
• 30 Day Avg. Volume: 8,957,598
• PEG Ratio: -2.00
• Price to Book (P/B): 2.90
• Price to Sales (P/S): 3.71
• P/FCF Ratio: 15.69
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 4.86
• Enterprise Value/Gross Profit: 14.81
• Enterprise Value/Ebitda: 32.79
• 1Y Price Target: $68.24
• Price Target Upside: -1.26% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 26
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $70.00 ▲(1.29% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is primarily supported by strong cash-flow resilience and a solid balance sheet, plus constructive technical momentum and a generally positive earnings-call outlook (FCF focus, buybacks, AI traction, and margin actions). The biggest constraint is valuation, with a very high P/E and no dividend yield provided, alongside the recent profitability downturn and near-term underutilization/non-core exit headwinds.

Positive Factors

Free cash flow generation

Consistently strong operating cash flow and a record $1.4B free cash flow (about a 24% FCF margin) provide durable financial flexibility. This supports continued R&D, capacity rationalization, large share repurchases, and buffers against cyclical downturns, reducing reliance on external financing.

AI data center traction

Meaningful AI data center revenue (> $250M) and expanding design wins signal structural exposure to a growing secular market. This diversifies end-market mix toward higher-growth, higher-value applications, strengthening long-term revenue potential and improving prospects for higher margin content per system.

Balance sheet & liquidity

Ample liquidity (≈$4.0B total, ~$2.5B cash and $1.5B revolver) and a leverage profile with debt below equity provide resilience. This balance sheet strength supports capital allocation flexibility—funding buybacks, M&A or capital spend—and mitigates risk from cyclical revenue and earnings volatility.

Negative Factors

Revenue & profit deterioration

Two consecutive years of revenue decline and a sharp drop in net income signal weakened earnings power, not just short-term seasonality. Sustained top-line contraction and margin compression reduce internal funding for strategic initiatives, make margin recovery harder, and strain returns on invested capital over multiple quarters.

Manufacturing underutilization

Persistent low utilization (high-single-digit underutilization drag) materially compresses gross margins and reduces operating leverage. Until structural demand or further capacity rationalization restores high-90% utilization, margin recovery will be limited and earnings remain sensitive to cyclical demand shifts.

Non-core exits & impairments

Planned non-core revenue exits and large asset impairments are structural actions that lower reported revenue and create volatility. While they can improve long-term focus, near-term top-line shrinkage and write-offs reduce comparability, compress GAAP results, and require successful redeployment of capital to offset lost revenues.

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

Strong and resilient cash generation (operating cash flow consistently strong; free cash flow positive and growing in 2025) and a generally healthy balance sheet (equity sizable vs. debt) support the score. Offsetting this, profitability and revenue weakened sharply in the latest year with notable operating earnings compression, reflecting cycle-driven margin and demand pressure.

Income Statement

Profitability has weakened sharply versus prior years: revenue declined in 2024 and again in 2025 (annual), and net income fell from strong 2022–2024 levels to a much lower level in 2025. While gross profit dollars remain solid, operating earnings compressed materially in 2025, signaling margin pressure and a tougher demand/pricing environment. The main strength is the company’s demonstrated ability to generate strong margins and profits in 2022–2024; the key weakness is the recent downcycle and reduced earnings power in the latest year.

Balance Sheet

The balance sheet appears generally healthy with sizable equity relative to debt and a manageable leverage profile in recent years (debt below equity in 2023–2024). Equity has grown meaningfully since 2020, indicating improved capitalization through the cycle. However, total debt remains large in absolute terms, and profitability volatility (as seen in 2025) could make leverage feel heavier in a prolonged downturn. Overall, financial flexibility looks solid but not immune to cyclical pressure.

Cash Flow

Cash generation is a clear strength: operating cash flow has been consistently strong across the period and remained robust in 2025, with free cash flow also positive and growing in 2025. Cash flow has at times outpaced accounting earnings (notably in 2025), which supports resilience during weaker profit periods. The main weakness is variability in free cash flow across years (including a notably weaker 2023), suggesting capital spending and working-capital swings can materially affect cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.00B	7.08B	8.25B	8.33B	6.74B
Gross Profit	1.94B	3.22B	3.88B	4.08B	2.71B
EBITDA	888.20M	2.54B	3.22B	3.01B	1.88B
Net Income	121.00M	1.57B	2.18B	1.90B	1.01B
Balance Sheet
Total Assets	12.52B	14.09B	13.22B	11.98B	9.63B
Cash, Cash Equivalents and Short-Term Investments	2.55B	2.99B	2.48B	2.92B	1.35B
Total Debt	3.47B	3.37B	3.36B	3.23B	3.10B
Total Liabilities	4.83B	5.28B	5.41B	5.77B	5.02B
Stockholders Equity	7.67B	8.80B	7.78B	6.19B	4.59B
Cash Flow
Free Cash Flow	1.42B	1.21B	438.40M	1.60B	1.29B
Operating Cash Flow	1.76B	1.91B	1.98B	2.63B	1.78B
Investing Cash Flow	-538.50M	-1.01B	-1.74B	-705.40M	-915.10M
Financing Cash Flow	-1.76B	-683.80M	-686.50M	-370.00M	-569.40M

ON Semiconductor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.11
• 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 69.11 is above the 20-day moving average (MA) of 65.52, above the 50-day MA of 60.73, and above the 200-day MA of 53.07, indicating a bullish trend. The MACD of 2.92 indicates Negative momentum. The RSI at 60.51 is Neutral, neither overbought nor oversold. The STOCH value of 57.78 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
UMC	77 Outperform	$24.99B	19.08	11.43%	6.06%	5.87%	-20.93%
NVDA	76 Outperform	$4.57T	46.56	107.36%	0.02%	65.22%	58.53%
GFS	69 Neutral	$25.87B	28.50	7.80%	―	0.25%	-106.22%
ON	64 Neutral	$27.84B	203.98	1.47%	―	-16.13%	-81.06%
STM	64 Neutral	$30.20B	177.18	0.93%	1.28%	-17.33%	-76.71%
ASX	63 Neutral	$49.03B	38.83	12.53%	2.29%	8.01%	10.41%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.

The most recent analyst rating on (ON) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on ON Semiconductor stock, see the ON Stock Forecast page.