ON Semiconductor logged a -2.9% change during today's afternoon session, and is now trading at a price of $66.26 per share.
Over the last year, ON Semiconductor logged a 1.0% change, with its stock price reaching a high of $111.35 and a low of $59.61. Over the same period, the stock underperformed the S&P 500 index by -14.0%. As of April 2023, the company's 50-day average price was $89.78. 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 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $5,878 | $5,518 | $5,255 | $6,740 | $8,326 | $8,350 |
| Gross Margins | 38% | 36% | 33% | 40% | 49% | 48% |
| Operating Margins | 14.0% | 8.0% | 7.0% | 19.0% | 28.0% | 35.0% |
| Net Margins | 11.0% | 4.0% | 4.0% | 15.0% | 23.0% | 23.0% |
| Net Income (MM) | $630 | $214 | $236 | $1,011 | $1,904 | $1,956 |
| Net Interest Expense (MM) | $128 | $148 | $168 | $130 | $95 | $94 |
| Depreciation & Amort. (MM) | $509 | $593 | $625 | $597 | $552 | $567 |
| Earnings Per Share | $1.44 | $0.51 | $0.56 | $2.27 | $4.25 | $4.37 |
| Diluted Shares (MM) | 436 | 416 | 419 | 444 | 448 | 450 |
| Free Cash Flow (MM) | $759 | $160 | $501 | $1,337 | $1,628 | $1,168 |
| Capital Expenditures (MM) | $515 | $535 | $384 | $445 | $1,005 | $1,365 |
| Net Current Assets (MM) | -$1,226 | -$2,081 | -$1,926 | -$1,240 | -$42 | $171 |
| Long Term Debt (MM) | $2,628 | $2,876 | $2,960 | $2,914 | $3,046 | $2,540 |
| Net Debt / EBITDA | 1.16 | 2.65 | 2.48 | 0.92 | 0.1 | 0.24 |
ON Semiconductor has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and low leverage. 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 irregular cash flows.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
ON Semiconductor has a trailing twelve month P/E ratio of 18.1, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $5.67, the company has a forward P/E ratio of 15.8. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 20.3%. On this basis, ON Semiconductor's PEG ratio is 0.89. Using instead the 10.2% 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 1.77, 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 3.81 while the sector average is 6.23. The company's shares are currently trading 66.5% above their Graham number.
ON Semiconductor Has an Analyst Consensus of Strong Upside Potential:
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 -24.9% 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 8.3% 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 $3,715,951,563.
