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onsemi Updates 2 Key Risk Factors
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onsemi Updates 2 Key Risk Factors

onsemi (ON) (formerly ON Semiconductor) is a technology company that designs, manufactures, and sells semiconductor components.

The company recently released its fourth-quarter results. Total revenues jumped 27.6% to $1.84 billion on a year-over-year basis. In addition, adjusted earnings per share spiked 211.4% year-over-year to $1.09 per share.

For the first quarter, management forecasts adjusted profits in the range of $0.98 to $1.10 per share and revenues of $1.85 billion to $1.95 billion.

Let’s look at the risk factors for onsemi using the new Tipranks Risk Factors tool.

Risk Factors

onsemi’s main risk category is Finance & Corporate, which accounts for 14 of the total 34 risks identified. The next major onsemi risk category is Legal & Regulatory, which accounts for 7 risks.

In its recent report, the organization warned investors about two new risks.

The first new risk factor falls under the Finance & Corporate category.

To be competitive, onsemi emphasizes the necessity to implement particular business strategies or restructuring activities. However, the company warns investors that putting these strategies in place might entail many adjustments that are often out of the company’s control. Furthermore, these actions may cause existing corporate activities to be disrupted. As a result, the corporation may be unable to implement these initiatives successfully, thereby affecting the company’s financials and profitability.

Another recently added risk for the organization falls under the Legal and Regulatory category.

onsemi advises investors that the semiconductor industry is increasingly focusing on corporate, social, and environmental responsibilities. New climate change-related legislation or restrictions, according to onsemi, might harm the sourcing, availability, and pricing of minerals used in semiconductor manufacturing, disrupting the supply chain even more. As a result, the company may be unable to satisfy client demand, resulting in poor sales and operating results. Furthermore, these legislative limits may cause the firm to incur additional costs, putting the financial results at risk.

Wall Street’s Take

Turning to Wall Street, the stock has a Moderate Buy consensus rating based on 15 Buys, 6 Holds, and 1 Sell. The average ON price target of $72.45 implies 16.4% upside potential to current levels.

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