One-glance verdict
Overvalued
$46.51 our estimate vs market $87.52
Wall Street consensus: $113.12 (143.2% higher than our fair-value estimate)
88% above our estimate, beyond the bull case
Fundamentals snapshot
ON Semiconductor Corporation
ON · NMS · Technology · Semiconductors
Current price
$87.52
52-week range
$44.56 - $134.92
Market cap
$34.06B
Balance sheet
Healthy
10.59x Adequate
Net debt $842.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.1% last year.
- Reward Returns 7.5% on equity, ahead of 66% of its peers.
- Risk Net debt grew 46.7% over 3 years.
- Risk Operating margin compressed from 33.2% to 18.2% over 3 years.
What this company does
ON Semiconductor Corporation
ON Semiconductor builds the tiny electronic chips that manage power and act as sensors in complex electronics, especially cars and factory equipment. The company makes most of its money selling these specialized components to the automotive industry for electric vehicles and to factories using automation. As the world increasingly adopts electric cars and smarter manufacturing, the demand for ON's specific type of chips is a key factor for its business.
How the company got here
ON Semiconductor, which now calls itself onsemi, was created in 1999 when it was spun off from Motorola's semiconductor business. For many years, it was known as a maker of a wide variety of basic chips. A major turning point came in 2016 with the purchase of Fairchild Semiconductor, which significantly boosted its expertise in managing high-voltage power. Starting in late 2020, a new CEO, Hassane El-Khoury, began a major strategy shift, moving the company away from low-profit, general-purpose chips. This new focus is on more specialized, higher-value products for the automotive and industrial markets.
What it actually does
Onsemi makes tiny electronic components called semiconductors, or chips, which are the building blocks of modern electronics. You won't see their brand name on a phone or a car, but their products are essential inside them. They specialize in chips that manage electricity, making devices more energy-efficient, and chips that act as sensors, giving devices the ability to "see" and understand the world around them. For example, their chips are critical in electric vehicles to manage the battery and power the motor, and in advanced safety systems that help cars avoid collisions.
Power Solutions Group (PSG)
This is onsemi's largest business segment, responsible for more than half of the company's revenue. Think of this group as making the "muscles" for electronic systems; its products control and convert electrical power. Key customers include car manufacturers who use these chips in electric vehicles to manage the high-voltage battery and efficiently run the motor. This segment also sells to makers of solar power equipment, factory automation systems, and the powerful computers that run AI data centers.
Analog and Mixed-Signal Group (AMG)
This group creates the "brains" that control the power solutions. Its chips don't handle the raw power themselves, but instead manage the flow of electricity within complex systems, telling the more powerful chips what to do. For example, in an electric car, these chips would monitor the battery's temperature and charge level. This segment, which was reorganized in early 2024, sells its products to the same core automotive and industrial customers as the Power Solutions Group.
Intelligent Sensing Group (ISG)
This segment gives devices the ability to "see." It is a world leader in making image sensors for cars, which are the tiny cameras used in advanced driver-assistance systems (ADAS) that enable features like automatic emergency braking and lane-keeping assist. This is the company's smallest segment by revenue, but it holds a dominant market share in the automotive sensing field. Beyond cars, these sensors are also used in factory robots, security cameras, and other industrial applications where machines need to visually understand their surroundings.
What management is betting on now
Management's strategy is tightly focused on two major trends: electric vehicles and industrial automation. They are investing heavily in a special type of semiconductor material called silicon carbide (SiC), which is extremely efficient at handling the high power levels in electric cars and their charging stations. The company is also betting on intelligent sensing for cars, providing the "eyes" for increasingly automated safety systems. Recently, the company has also highlighted the growing demand for its power management chips in the massive data centers that power artificial intelligence (AI).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$293.60M
FY2024 Q4
$434.80M
FY2025 Q2
$454.70M
FY2025 Q3
$106.10M
FY2025 Q4
$372.40M
FY2026 Q2
$217.20M
Revenue
$1.51B
Net income
$-33.40M
Diluted EPS
-0.08
Operating cash flow
$239.10M
Free cash flow
$217.20M
Fetching…
Sources
Revenue
$1.55B
Net income
$255.00M
Diluted EPS
0.63
Operating cash flow
$418.70M
Free cash flow
$372.40M
Fetching…
Sources
Revenue
$1.47B
Net income
$170.30M
Diluted EPS
0.41
Operating cash flow
$184.30M
Free cash flow
$106.10M
Fetching…
Sources
Revenue
$1.45B
Net income
$-486.10M
Diluted EPS
-1.15
Operating cash flow
$602.30M
Free cash flow
$454.70M
Fetching…
Sources
Revenue
$1.72B
Net income
$379.90M
Diluted EPS
0.88
Operating cash flow
$579.70M
Free cash flow
$434.80M
Fetching…
Sources
Revenue
$1.76B
Net income
$401.70M
Diluted EPS
0.93
Operating cash flow
$465.80M
Free cash flow
$293.60M
Fetching…
Sources
Is it cheap or expensive?
Fair value $46.51 vs current price $87.52
Wall Street consensus is the average analyst price target: $113.12 (143.2% higher than our fair-value estimate).
Our most-likely fair value is $46.51 a share — about 46.9% below today's price of $87.52, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $842.2M. Interest coverage 10.6x.
Net debt
$842.20M
Interest coverage
10.59x
ON Semiconductor Corporation's profit covers its interest bill about 10.6 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ON
BASELINE
ON Semiconductor Corporation
Total debt $3.25B Interest coverage 10.59x This is the baseline the peer rows are being compared against.
Total debt $5.64B Interest coverage 2.46x -77% vs ON Carries about 4.3x less debt cushion than ON.
Total debt $11.72B Interest coverage 6.51x -39% vs ON Carries about 1.6x less debt cushion than ON.
Total debt $4.02B Interest coverage 5.87x -45% vs ON Carries about 1.8x less debt cushion than ON.
Total debt $9.45B Interest coverage 8.80x -17% vs ON Carries about 1.2x less debt cushion than ON.
Total debt $7.36B Interest coverage 0.82x -92% vs ON Carries about 12.9x less debt cushion than ON.
What you should know
The case for and against ON
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.1% last year.
-
Returns 7.5% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 46.7% over 3 years.
-
Operating margin compressed from 33.2% to 18.2% over 3 years.
-
Stock trades 9.1% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
64.35x
Forward P/E
20.15x
P/B
4.70x
P/S
5.62x
EV/EBITDA
17.67x
PEG ratio
0.30x
Profitability
How much profit each dollar creates
Gross margin
42.7%
Operating margin
18.2%
Net margin
9.5%
ROE
7.5%
ROA
6.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.44x
Current ratio
4.87x
Quick ratio
2.80x
Total debt
$3.25B
Total cash
$2.40B
Growth
How the business has been compounding
Revenue TTM
$6.06B
Revenue 5Y CAGR
-2.9%
EPS TTM
1.36
EPS 5Y CAGR
-59.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.40B
Free CF TTM
$1.42B
FCF margin
23.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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