ON Semiconductor (ON) AI Stock Analysis

• Market Cap: $20.48B
• Dividend Yield: N/A
• Average Volume (3M): 8.91M
• Price to Earnings (P/E): 46.7
• Beta (1Y): 1.46
• Revenue Growth: -17.93%
• EPS Growth: -75.83%
• Country: US
• Employees: 26,400
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.53
• Shares Outstanding: 408,974,000
• 10 Day Avg. Volume: 9,535,311
• 30 Day Avg. Volume: 8,914,392
• 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: 1.19
• Enterprise Value/Revenue: 3.80
• Enterprise Value/Gross Profit: 10.21
• Enterprise Value/Ebitda: 19.32
• 1Y Price Target: $58.48
• Price Target Upside: 16.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

• Rating: 69 Neutral
• Price Target: $56.00 ▲(11.82% Upside)

ON Semiconductor's overall stock score is driven by a stable financial foundation and promising strategic initiatives, particularly in AI and China markets. However, challenges such as declining revenue, high valuation, and mixed technical signals weigh on the score. The earnings call highlights both opportunities and risks, reflecting a balanced outlook.

Positive Factors

AI Data Center Growth

The strong growth in AI data center revenue indicates ON Semiconductor's successful expansion into high-demand sectors, enhancing its market position and long-term revenue potential.

China Market Expansion

The significant growth in the China market underscores ON Semiconductor's ability to capitalize on the expanding EV sector, providing a durable revenue stream and competitive advantage in a key market.

Strategic Partnerships

Strategic partnerships with industry leaders enhance ON Semiconductor's technological capabilities and market reach, supporting sustainable growth and innovation.

Negative Factors

Declining Automotive Revenue

The decline in automotive revenue highlights challenges in maintaining market share in key regions, potentially impacting future growth in this critical segment.

Gross Margin Challenges

Gross margin challenges due to noncash charges indicate pressure on profitability, which could affect ON Semiconductor's ability to invest in growth initiatives.

ISG Revenue Decrease

The decline in ISG revenue suggests potential difficulties in maintaining competitive edge in the sensing technology sector, impacting long-term revenue stability.

ON Semiconductor Business Overview & Revenue Model

Company Description

ON Semiconductor (ON) is a leading global supplier of semiconductor-based solutions, specializing in the design and manufacture of a wide range of semiconductor products. The company operates across various sectors, including automotive, industrial, communications, consumer electronics, and computing. Its core product offerings include power management solutions, sensors, analog ICs, and discrete components, which enable energy efficiency and connectivity in electronic devices.

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 shows strong operational efficiency with positive EBIT and EBITDA margins. However, declining revenue and profit margins, along with a reduced return on equity, pose challenges for future profitability. The balance sheet remains stable with a manageable debt level, but the negative growth in free cash flow highlights areas for improvement.

Income Statement

ON Semiconductor's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue and profit margins compared to previous years. The gross profit margin decreased to 37.89% from 45.41% in 2024, and the net profit margin dropped to 7.28% from 22.21%. Revenue growth has been negative, with a -3.998% change in the TTM period. Despite these challenges, the company maintains a positive EBIT and EBITDA margin, indicating operational efficiency. However, the declining trend in revenue and margins poses a risk to future profitability.

Balance Sheet

The balance sheet of ON Semiconductor reflects a stable financial position with a manageable debt-to-equity ratio of 0.42 in the TTM period, which is an improvement from previous years. The return on equity (ROE) has decreased to 5.59% from 17.88% in 2024, indicating a decline in profitability relative to equity. The equity ratio remains healthy, suggesting a strong capital structure. Overall, the balance sheet shows stability, but the reduced ROE highlights potential challenges in generating returns for shareholders.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, with a -2.252% change in the TTM period. Despite this, the company maintains a strong operating cash flow to net income ratio of 1.45, indicating efficient cash generation from operations. The free cash flow to net income ratio is 0.83, reflecting a solid ability to convert earnings into cash. While cash flow generation remains robust, the negative growth in free cash flow warrants attention.

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	2.38B	3.17B	3.83B	4.00B	2.62B	1.60B
EBITDA	1.26B	2.54B	3.21B	3.00B	1.90B	990.10M
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	8.67B
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	3.10B	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	1.29B	1.21B	438.40M	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: 50.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 50.08 is below the 20-day moving average (MA) of 51.09, below the 50-day MA of 50.25, and above the 200-day MA of 48.60, indicating a neutral trend. The MACD of 0.31 indicates Positive momentum. The RSI at 47.03 is Neutral, neither overbought nor oversold. The STOCH value of 11.17 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
NVDA	―	$4.92T	57.63	109.42%	0.02%	71.55%	64.54%
UMC	―	$18.92B	14.95	10.97%	6.27%	5.46%	-26.72%
ON	―	$20.48B	46.73	5.72%	―	-17.93%	-75.83%
ASX	―	$35.07B	15.22	8.40%	2.22%	4.86%	6.44%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STM	―	$22.07B	43.39	3.00%	1.42%	-17.33%	-76.71%
GFS	―	$19.68B	―	-1.01%	―	-0.65%	-114.26%

ON Semiconductor Corporate Events

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.

The most recent analyst rating on (ON) stock is a Hold with a $56.00 price target. To see the full list of analyst forecasts on ON Semiconductor stock, see the ON Stock Forecast page.

ON Semiconductor’s Earnings Call: Mixed Sentiments and Strategic Growth

In the recent earnings call, ON Semiconductor Corporation presented a mixed sentiment, highlighting both positive growth and ongoing challenges. The company reported strong growth in the Chinese market and the AI data center sector, alongside strategic milestones with the Treo platform and share repurchases. However, these positive developments were tempered by declines in automotive and ISG revenue, as well as lower gross margin guidance due to underutilization charges.

ON Semiconductor: Navigating Uncertainties and Risks in 2024

ON Semiconductor Corporation faces significant business risks due to various trends, uncertainties, and potential changes in their operational and financial landscape. The company regularly updates its risk factors, but there have been no substantial changes from those disclosed in their 2024 Form 10-K. Forward-looking statements in their reports highlight potential discrepancies between projected and actual outcomes, emphasizing the inherent uncertainty in their strategic plans. Investors are advised to consider these risks carefully, as unforeseen factors could materially impact the company’s performance and stock value.

ON Semiconductor Reports Q2 2025 Financial Results

ON Semiconductor Corporation, commonly known as onsemi, is a leading provider of intelligent power and sensing technologies, primarily serving the automotive and industrial sectors. The company is recognized for its innovative solutions that drive advancements in vehicle electrification, sustainable energy grids, industrial automation, and 5G infrastructure.