ON Semiconductor (ON) AI Stock Analysis

• Market Cap: $19.49B
• Dividend Yield: N/A
• Average Volume (3M): 9.62M
• Price to Earnings (P/E): 44.5
• Beta (1Y): 1.39
• Revenue Growth: -17.93%
• EPS Growth: -75.83%
• Country: US
• Employees: 26,400
• Sector: Technology
• Sector Strength: 98
• Industry: Semiconductors
• EPS (TTM): 0.53
• Shares Outstanding: 408,974,000
• 10 Day Avg. Volume: 12,625,637
• 30 Day Avg. Volume: 9,622,207
• 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: 1.25
• Enterprise Value/Revenue: 3.80
• Enterprise Value/Gross Profit: 10.03
• Enterprise Value/Ebitda: 27.74
• 1Y Price Target: $57.42
• Price Target Upside: 21.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

• Rating: 63 Neutral
• Price Target: $51.00 ▲(8.28% Upside)

ON Semiconductor's overall stock score reflects a stable financial foundation with strong operational efficiency, but is weighed down by declining revenue and profit margins. Technical analysis indicates bearish momentum, and the stock appears overvalued based on its P/E ratio. The earnings call provided mixed sentiment, with growth in certain sectors offset by challenges in others.

Positive Factors

Automotive Performance

Automotive sales outperformed expectations, driven by strength in China, where revenue rose 23% quarter-over-quarter.

Earnings

Onsemi reported slightly better results/guidance driven by Automotive and AI/DC strength.

Negative Factors

Gross Margin Pressure

Utilization remains a significant gross margin headwind, with 3Q GM guided to be down 10 bps to ~37.5% at the midpoint.

Inventory Challenges

Weeks of channel inventory increased sequentially from 10.1 weeks in 1Q to 10.8, and the additional inventory will need to be unwound, which may be a headwind for future quarters.

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 selling integrated circuits, discrete components, and custom solutions to a diverse customer base that spans multiple industries. Key revenue streams include automotive electronics, where ON provides solutions for electric vehicles and advanced driver-assistance systems, as well as industrial applications that require energy-efficient power management and sensing technology. Additionally, ON has established significant partnerships with major technology firms, enhancing its market presence and driving sales through collaborative projects. Factors such as the growing demand for energy-efficient solutions, the expansion of electric vehicles, and advancements in IoT technology contribute to the company's earnings.

ON Semiconductor Financial Statement Overview

Summary

ON Semiconductor demonstrates strong cash flow and a solid balance sheet with low leverage, indicating financial stability. However, there are challenges with declining revenue and profitability margins, which could impact future growth.

Income Statement

The Gross Profit Margin for TTM (Trailing-Twelve-Months) is 39.7%, indicating good profitability. However, the Net Profit Margin has decreased to 9.5% from 22.2% in the previous year, reflecting decreased efficiency at converting revenue into net income. The Revenue Growth Rate is negative at -5.9%, showing a decline in sales compared to the previous year. EBIT and EBITDA margins are also lower, suggesting reduced operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is 0.42, demonstrating a strong capital structure with manageable debt levels. The Equity Ratio stands at 60.6%, indicating a solid equity base. Return on Equity (ROE) is 7.9% for TTM (Trailing-Twelve-Months), which is a decline from previous years, suggesting a decrease in profitability relative to equity.

Cash Flow

The Free Cash Flow to Net Income Ratio is 2.44, indicating strong cash generation relative to net income. However, the Free Cash Flow Growth Rate is 27.8%, reflecting a slowdown compared to the previous annual growth. The Operating Cash Flow to Net Income Ratio is 3.17, demonstrating robust cash flow management, but the decline in operating cash flow from the previous year is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.40B	7.08B	8.25B	8.33B	6.74B	5.25B
Gross Profit	2.42B	3.22B	3.88B	4.08B	2.71B	1.72B
EBITDA	876.20M	2.54B	3.22B	3.01B	1.88B	970.10M
Net Income	465.80M	1.57B	2.18B	1.90B	1.01B	234.20M
Balance Sheet
Total Assets	13.13B	14.09B	13.22B	11.98B	9.63B	8.66B
Cash, Cash Equivalents and Short-Term Investments	2.83B	2.99B	2.48B	2.92B	1.35B	1.08B
Total Debt	3.37B	3.37B	3.36B	3.23B	3.07B	3.49B
Total Liabilities	5.17B	5.28B	5.41B	5.77B	5.02B	5.11B
Stockholders Equity	7.94B	8.80B	7.78B	6.19B	4.59B	3.54B
Cash Flow
Free Cash Flow	1.51B	1.21B	401.90M	1.60B	1.29B	400.70M
Operating Cash Flow	1.83B	1.91B	1.98B	2.63B	1.78B	884.30M
Investing Cash Flow	-520.20M	-1.01B	-1.74B	-705.40M	-915.10M	-453.60M
Financing Cash Flow	-1.02B	-683.80M	-686.50M	-370.00M	-569.40M	-244.00M

ON Semiconductor Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 47.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ON, the sentiment is Negative. The current price of 47.1 is below the 20-day moving average (MA) of 55.32, below the 50-day MA of 53.93, and below the 200-day MA of 53.46, indicating a bearish trend. The MACD of -2.10 indicates Positive momentum. The RSI at 32.23 is Neutral, neither overbought nor oversold. The STOCH value of 8.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ON.

ON Semiconductor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRVL	72 Outperform	$66.63B	―	-3.54%	0.31%	21.60%	50.00%
UMC	71 Outperform	$17.01B	13.59	10.98%	7.19%	5.46%	-26.72%
Sector *	68 Neutral	¥238.13B	15.93	6.62%	2.46%	9.00%	-0.33%
ON	63 Neutral	$19.49B	44.47	5.72%	―	-17.93%	-75.83%
SWKS	63 Neutral	$10.47B	28.10	6.61%	3.97%	-8.24%	-48.31%
STM	60 Neutral	$22.78B	36.70	3.72%	1.24%	-22.97%	-78.58%
MCHP	58 Neutral	$32.89B	84.25	-2.24%	2.98%	-35.70%	-113.08%

ON Semiconductor Corporate Events

ON Semiconductor Holds Annual Stockholders Meeting

On May 15, 2025, ON Semiconductor held its Annual Meeting of Stockholders where eight directors were elected for a one-year term. Additionally, stockholders approved the executive compensation and ratified PricewaterhouseCoopers LLP as the independent auditor for 2025.

The most recent analyst rating on (ON) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on ON Semiconductor stock, see the ON Stock Forecast page.