One-glance verdict
Overvalued
$47.10 our estimate vs market $120.90
Wall Street consensus: $105.45 (123.9% higher than our fair-value estimate)
157% above our estimate, beyond the bull case
Fundamentals snapshot
ON Semiconductor Corporation
ON · NMS · Technology · Semiconductors
Current price
$120.90
52-week range
$44.56 - $134.92
Market cap
$47.01B
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 Stock trades 51.9% above its 5-year average P/E.
- Risk Net debt grew 46.7% over 3 years.
What this company does
ON Semiconductor Corporation
ON Semiconductor makes essential chips that manage electricity and provide sensing abilities, like tiny electronic "eyes," for other products. The company primarily sells to the automotive and industrial sectors, meaning its chips are crucial components inside electric vehicles and factory robots. As these areas become more technologically advanced, the demand for ON's specialized chips is expected to grow.
How the company got here
ON Semiconductor, which now goes by onsemi, was created in 1999 when it was spun off from Motorola's semiconductor business. For many years, it focused on making basic, high-volume chips. A major turning point was the acquisition of Fairchild Semiconductor in 2016, which significantly expanded its product offerings. More recently, under new leadership since 2020, the company has shifted its focus to more specialized and profitable areas like electric vehicles and industrial automation.
What it actually does
onsemi makes tiny electronic components called semiconductors, which are the building blocks of most modern electronics. You wouldn't typically buy their products directly, but they are essential parts inside things you use every day, like cars, computers, and factory equipment. These components manage power, act as sensors, and control how electronic devices function. The company has a particular focus on making electronics for electric vehicles and for industrial settings, like automated factories.
Power Solutions Group (PSG)
This is onsemi's largest business segment, bringing in more than half of the company's revenue. It creates the "muscles" for electronic systems, making components that manage and convert electricity efficiently. For example, in an electric car, these parts help control the flow of power from the battery to the motor, which can help the car drive farther on a single charge. This group's products are also used in solar power systems and the massive data centers that power the internet.
Analog and Mixed-Signal Group (AMG)
This segment designs the "brains" that control the power components made by the Power Solutions Group. These chips handle both analog signals (like temperature or sound) and digital signals (the ones and zeros of computers). Think of them as translators, allowing the real world to communicate with the digital world inside a device. This group's products are crucial for managing power in complex systems and for connecting different electronic components so they can work together in everything from cars to factory robots.
Intelligent Sensing Group (ISG)
This part of the company creates the "eyes" for electronic devices. It is a world leader in making image sensors, especially for the automotive industry. These sensors are a key part of advanced driver-assistance systems (ADAS), which include features like automatic braking and lane-keeping assistance. They are also used in industrial automation, where cameras on an assembly line can spot defective parts.
What management is betting on now
The company's leadership is heavily focused on two major trends: electric vehicles and industrial automation. They are investing heavily in a material called silicon carbide (SiC), which is much more efficient for high-power applications like electric car chargers and drivetrains. By focusing on these high-growth areas, they aim to sell more sophisticated and profitable components rather than competing in the market for basic, everyday chips. The goal is to become a key supplier for the transition to a more electric and automated world.
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 $47.10 vs current price $120.90
Wall Street consensus is the average analyst price target: $105.45 (123.9% higher than our fair-value estimate).
Our most-likely fair value is $47.10 a share — about 61.0% below today's price of $120.90, 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 $2.78B Interest coverage 5.87x -45% vs ON Carries about 1.8x less debt cushion than ON.
Total debt $9.60B Interest coverage 8.80x -17% vs ON Carries about 1.2x less debt cushion than ON.
Total debt $7.52B 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
-
Stock trades 51.9% above its 5-year average P/E.
-
Net debt grew 46.7% over 3 years.
-
Operating margin compressed from 33.2% to 18.2% over 3 years.
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)
89.56x
Forward P/E
28.35x
P/B
6.49x
P/S
7.75x
EV/EBITDA
23.56x
PEG ratio
0.39x
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
1.35
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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