ON Semiconductor (ON) AI Stock Analysis

• Market Cap: $22.40B
• Dividend Yield: N/A
• Average Volume (3M): 9.63M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.53
• Revenue Growth: -18.28%
• EPS Growth: -70.98%
• Country: US
• Employees: 26,400
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): 0.55
• Shares Outstanding: 417,885,350
• 10 Day Avg. Volume: 8,088,543
• 30 Day Avg. Volume: 9,631,507
• PEG Ratio: -0.58
• Price to Book (P/B): 2.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.24
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 8.58
• Enterprise Value/Ebitda: 2.38
• 1Y Price Target: $50.01
• Price Target Upside: -10.62% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25

• Rating: 72 Outperform
• Price Target: $62.00 ▲(10.81%Upside)

ON Semiconductor's overall score reflects a balance between strong technical momentum and financial stability, against challenges in valuation and declining revenue growth. The company's strategic initiatives and restructuring efforts provide a positive outlook, but high P/E ratio and declining automotive revenue remain concerns.

Positive Factors

Automotive Market

ON remains well-positioned to benefit from Auto xEV/ADAS/SDV given its strong power/connectivity/sensing portfolio.

Market Share

ON believes its market share in SiC has expanded due to its strong solution value proposition.

Product Development

ON's new product ramps in China EVs are expected to accelerate, contributing to a positive outlook.

Negative Factors

Competition

Intense competition in image sensors and a negative stance on SiC contribute to concerns over long-term growth prospects.

Financial Performance

Gross margin improvement is not expected until the first half of 2026, which affects the company's potential for stock re-rating above 15x.

Pricing and Demand

The company is expected to face pricing headwinds and a drop-off of capacity reservation fees, which could offset gross margin improvement.

ON Semiconductor Business Overview & Revenue Model

Company Description

ON Semiconductor (ON) is a leading provider of semiconductor solutions offering a comprehensive portfolio of energy-efficient power management, analog, sensors, logic, timing, connectivity, discrete, system-on-chip (SoC) and custom devices. The company operates across various sectors including automotive, industrial, and communications, catering to the growing demand for advanced technology in electrification, energy infrastructure, and sustainable energy solutions.

How the Company Makes Money

ON Semiconductor generates revenue through the design, manufacture, and sale of semiconductor components that are integral to a wide range of electronic devices and systems. The company's key revenue streams include the automotive sector, where it provides components for advanced driver-assistance systems (ADAS), electric vehicles, and other automotive applications. In the industrial sector, ON Semiconductor offers products for automation, energy infrastructure, and medical applications. Communications and computing are also significant contributors, with the company supplying components for wireless and wired connectivity solutions. Significant partnerships with original equipment manufacturers (OEMs) and other technology firms enhance its market reach and contribute to its earnings. Additionally, strategic acquisitions and investments in research and development support innovation and sustain the company's competitive advantage in the semiconductor industry.

ON Semiconductor Financial Statement Overview

Summary

ON Semiconductor shows strong cash flow and a solid balance sheet with low leverage, reflecting financial stability. However, the income statement reveals challenges with declining revenue and profitability margins. While the company remains fundamentally sound with a manageable debt level, improving revenue growth and profit margins is crucial for sustaining 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	6.67B	7.08B	8.25B	8.33B	6.74B	5.25B
Gross Profit	2.64B	3.22B	3.88B	4.08B	2.71B	1.72B
EBITDA	1.30B	1.77B	3.22B	3.34B	1.98B	1.04B
Net Income	633.70M	1.57B	2.18B	1.90B	1.01B	234.20M
Balance Sheet
Total Assets	13.25B	14.09B	13.22B	11.98B	9.63B	8.66B
Cash, Cash Equivalents and Short-Term Investments	3.01B	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	5.21B	5.28B	5.41B	5.77B	5.02B	5.11B
Stockholders Equity	8.03B	8.80B	7.78B	6.19B	4.59B	3.54B
Cash Flow
Free Cash Flow	1.55B	1.21B	401.90M	1.60B	1.29B	400.70M
Operating Cash Flow	2.01B	1.91B	1.98B	2.63B	1.78B	884.30M
Investing Cash Flow	-989.40M	-1.01B	-1.74B	-705.40M	-915.10M	-453.60M
Financing Cash Flow	-870.60M	-683.80M	-686.50M	-370.00M	-569.40M	-244.00M

ON Semiconductor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 55.95 is above the 20-day moving average (MA) of 52.68, above the 50-day MA of 46.06, and above the 200-day MA of 55.46, indicating a bullish trend. The MACD of 2.34 indicates Positive momentum. The RSI at 67.26 is Neutral, neither overbought nor oversold. The STOCH value of 58.84 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	80 Outperform	$19.09B	13.80	11.65%	4.66%	2.22%	-22.39%
STM	76 Outperform	$26.98B	25.62	6.33%	1.02%	-25.35%	-70.00%
SWKS	74 Outperform	$11.58B	30.14	6.70%	3.63%	-12.90%	-51.90%
ON	72 Outperform	$22.40B	38.81	7.85%	―	-18.28%	-70.98%
MRVL	71 Outperform	$65.73B	―	-3.54%	0.31%	21.60%	50.00%
MCHP	64 Neutral	$38.66B	84.25	>-0.01%	2.54%	-42.35%	-100.12%
Sector *	63 Neutral	$33.24B	5.92	-11.55%	1.90%	5.54%	-20.14%

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.