ON Semiconductor logged a -4.2% change during today's evening session, and is now trading at a price of $89.14 per share.
ON Semiconductor returned gains of 54.0% last year, with its stock price reaching a high of $111.35 and a low of $58.43. Over the same period, the stock outperformed the S&P 500 index by 32.0%. More recently, the company's 50-day average price was $94.63. ON Semiconductor Corporation provides intelligent sensing and power solutions in the United States and internationally. Based in Scottsdale, AZ, the large-cap Technology company has 31,000 full time employees. ON Semiconductor has not offered a dividend during the last year.
The Business Has Weak Operating Margins:
| 2018-02-21 | 2019-02-20 | 2020-02-19 | 2021-02-16 | 2022-02-14 | 2023-02-06 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $5,543 | $5,878 | $5,518 | $5,255 | $6,740 | $8,326 |
| Gross Margins | 37.0% | 38.0% | 36.0% | 33.0% | 40.0% | 49.0% |
| Operating Margins | 12% | 15% | 11% | 8% | 20% | 33% |
| Net Margins | 15.0% | 11.0% | 4.0% | 4.0% | 15.0% | 23.0% |
| Net Income (MM) | $811 | $627 | $212 | $234 | $1,010 | $1,902 |
| Net Interest Expense (MM) | -$138 | -$122 | -$138 | -$164 | -$129 | -$79 |
| Depreciation & Amort. (MM) | -$482 | -$509 | -$593 | -$625 | -$597 | -$552 |
| Earnings Per Share | $1.89 | $1.44 | $0.51 | $0.56 | $2.29 | $4.24 |
| EPS Growth | n/a | -23.81% | -64.58% | 9.8% | 308.93% | 85.15% |
| Diluted Shares (MM) | 428 | 436 | 416 | 419 | 441 | 448 |
| Free Cash Flow (MM) | $1,467 | $1,752 | $1,227 | $1,262 | $2,213 | $3,579 |
| Capital Expenditures (MM) | -$373 | -$478 | -$533 | -$377 | -$431 | -$946 |
| Net Current Assets (MM) | -$1,461 | -$1,226 | -$2,081 | -$1,926 | -$1,240 | -$42 |
| Long Term Debt (MM) | $2,704 | $2,628 | $2,876 | $2,960 | $2,914 | $3,046 |
| Net Debt / EBITDA | 1.72 | 1.24 | 2.22 | 2.32 | 0.88 | 0.08 |
ON Semiconductor has a pattern of improving cash flows and an excellent current ratio. Additionally, the company's financial statements display low leverage and a strong EPS growth trend. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a positive growth rate. Finally, we note that ON Semiconductor has weak revenue growth and a flat capital expenditure trend.
A Lower P/E Ratio Than Its Sector Average but Trades Above Its Graham Number:
ON Semiconductor has a trailing twelve month P/E ratio of 21.7, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $5.68, the company has a forward P/E ratio of 16.7. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 14.4%. On this basis, ON Semiconductor's PEG ratio is 1.5. Using instead the 9.5% weighted average of ON Semiconductor's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 2.28, which suggests that its shares may be overpriced. In contrast, the market is likely undervaluing ON Semiconductor in terms of its equity because its P/B ratio is 5.51 while the sector average is 6.23. The company's shares are currently trading 145.2% above their Graham number.
ON Semiconductor Has an Average Rating of Buy:
The 24 analysts following ON Semiconductor have set target prices ranging from $95.0 to $135.0 per share, for an average of $119.5 with a buy rating. As of April 2023, the company is trading -20.8% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
ON Semiconductor has an above average percentage of its shares sold short because 8.0% of the company's shares are sold short. Institutions own 104.2% of the company's shares, and the insider ownership rate stands at 0.28%, suggesting a small amount of insider investors. The largest shareholder is FMR, LLC, whose 13% stake in the company is worth $4,999,093,109.
