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ON Semiconductor
(NASDAQ:ON)
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Rating:67Neutral
Price Target:
$87.00
▲(0.22% Upside)
Action:Reiterated
Date:08/04/26
ON’s score is driven primarily by improving fundamentals (rebounding profitability and strong free cash flow) and a strong, upbeat earnings call with guidance for further margin expansion and AI data center growth. These positives are tempered by weak technical trend signals (price below key moving averages with negative MACD) and a premium valuation (high P/E with no dividend yield provided), which increases execution risk.
Positive Factors
Strong free cash flow
Sustained, above‑earnings free cash flow provides durable financial flexibility: funds share repurchases, debt repayment, and strategic M&A while supporting low capex. High FCF conversion reduces reliance on external financing and underpins long‑term capital allocation and resilience through cycles.
Negative Factors
Rising leverage vs. prior
Higher debt relative to equity reduces financial flexibility and increases sensitivity to cyclical downturns. While balance sheet remains sizable, elevated leverage versus prior years constrains maneuverability for capex or strategic spending and raises refinancing and coverage risk if cash flows weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Sustained, above‑earnings free cash flow provides durable financial flexibility: funds share repurchases, debt repayment, and strategic M&A while supporting low capex. High FCF conversion reduces reliance on external financing and underpins long‑term capital allocation and resilience through cycles.
Read all positive factors
ON Semiconductor Key Performance Indicators (KPIs)
Any
Revenue by End Market
Shows revenue distribution across various end markets, offering a view of the company's exposure to different industries and potential shifts in demand.
Shows revenue distribution across various end markets, offering a view of the company's exposure to different industries and potential shifts in demand.
Data provided by:
The Fly
The FlyON Semiconductor (ON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.60B
Dividend YieldN/A
Average Volume (3M)11.93M
Price to Earnings (P/E)50.5
Beta (1Y)1.79
Revenue Growth-3.14%
EPS Growth44.55%
CountryUS
Employees22,600
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.58
Shares Outstanding389,311,700
10 Day Avg. Volume8,408,221
30 Day Avg. Volume11,934,378
Financial Highlights & Ratios
PEG Ratio-2.03
Price to Book (P/B)2.90
Price to Sales (P/S)3.71
P/FCF Ratio15.69
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$109.32Price Target Upside25.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)3.09
Revenue Forecast (FY)$6.48B
ON Semiconductor Business Overview & Revenue Model
Company Description
ON Semiconductor Corporation operates as a global provider of sophisticated power and sensing solutions. Their cutting-edge power innovations are pivotal in modernizing various sectors: they contribute to the development of lighter, extended-range...
How the Company Makes Money
onsemi primarily makes money by selling semiconductor devices and related solutions to original equipment manufacturers (OEMs) and their supply chains (including contract manufacturers and distributors). Revenue is generated from product sales acr...
ON Semiconductor Earnings Call Summary
Earnings Call Date:Aug 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: revenue growth, meaningful margin expansion, robust free cash flow, upgraded AI data center outlook (now expected to more than double in 2026), and multiple product and design wins (silicon carbide, high-voltage, ESS, Treo). Management provided constructive Q3 guidance (revenue $1.65B–$1.75B, non-GAAP gross margin 40%–42%, non-GAAP EPS $0.81–$0.93) and highlighted strategic moves (Synaptics acquisition, Fab Right divestitures) that support long-term profitability. Headwinds include input cost inflation, extended lead times and selective supply constraints that required short-term prioritization of AI shipments over automotive/industrial, along with ongoing restructuring impacts. Overall, positives are numerous and sizable, and the company appears positioned to sustain margin and cash-flow improvements while managing near-term supply and cost pressures.Positive Updates
Revenue and Top-Line Recovery
Q2 revenue of $1.6 billion, up ~9% year-over-year and up 6% sequentially; Q2 revenue was above the midpoint of guidance and above normal seasonality despite completing $35M of planned non-core revenue exits.
Negative Updates
Input Cost Inflation
Management is seeing incremental increases in input costs (raw materials and external manufacturing); a second round of price increases is being implemented to offset these costs and benefits are expected to appear over the next several quarters; management does not expect input costs to decline in 2027.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Top-Line Recovery
Q2 revenue of $1.6 billion, up ~9% year-over-year and up 6% sequentially; Q2 revenue was above the midpoint of guidance and above normal seasonality despite completing $35M of planned non-core revenue exits.
Read all positive updates
Company Guidance
Onsemi guided Q3 non‑GAAP revenue of $1.65–$1.75 billion, non‑GAAP gross margin of 40%–42% (includes $8M of share‑based compensation), non‑GAAP operating expenses of $303–$318M (includes $33M SBC), non‑GAAP other income of about $18M, a non‑GAAP tax rate of ~15%, a non‑GAAP share count of ~395M and non‑GAAP EPS of $0.81–$0.93 (midpoint implying EPS growth nearly 3x revenue growth); they expect capex of $40–$50M in Q3 and now expect full‑year capex below 5% of revenue, anticipate sequential gross‑margin expansion through the year, see Q3 utilization flat to up from Q2’s ~83%, and reiterated medium‑term end‑market pacing (AI data center now expected to more than double in 2026, ESS revenue ~+40% YoY, and China automotive SiC revenue +60–70% YoY).ON Semiconductor Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
72
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.20B | 6.00B | 7.08B | 8.25B | 8.33B | 6.74B |
| Gross Profit | 2.32B | 1.94B | 3.22B | 3.88B | 4.08B | 2.71B |
| EBITDA | 1.27B | 888.20M | 2.54B | 3.22B | 3.01B | 1.88B |
| Net Income | 630.20M | 121.00M | 1.57B | 2.18B | 1.90B | 1.01B |
Balance Sheet | ||||||
| Total Assets | 13.49B | 12.52B | 14.09B | 13.22B | 11.98B | 9.63B |
| Cash, Cash Equivalents and Short-Term Investments | 3.86B | 2.55B | 2.99B | 2.48B | 2.92B | 1.35B |
| Total Debt | 4.48B | 3.47B | 3.37B | 3.36B | 3.23B | 3.10B |
| Total Liabilities | 6.25B | 4.83B | 5.28B | 5.41B | 5.77B | 5.02B |
| Stockholders Equity | 7.22B | 7.67B | 8.80B | 7.78B | 6.19B | 4.59B |
Cash Flow | ||||||
| Free Cash Flow | 1.77B | 1.42B | 1.21B | 438.40M | 1.60B | 1.29B |
| Operating Cash Flow | 1.67B | 1.76B | 1.91B | 1.98B | 2.63B | 1.78B |
| Investing Cash Flow | -211.30M | -538.50M | -1.01B | -1.74B | -705.40M | -915.10M |
| Financing Cash Flow | -468.00M | -1.76B | -683.80M | -686.50M | -370.00M | -569.40M |
ON Semiconductor Technical Analysis
Negative
86.81
Price Trends
101.34
Negative
93.93
Negative
75.70
Positive
Market Momentum
-5.62
Negative
41.34
Neutral
23.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ON, the sentiment is Negative. The current price of 86.81 is above the 20-day moving average (MA) of 85.72, below the 50-day MA of 101.34, and above the 200-day MA of 75.70, indicating a neutral trend. The MACD of -5.62 indicates Negative momentum. The RSI at 41.34 is Neutral, neither overbought nor oversold. The STOCH value of 23.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ON.
ON Semiconductor Risk Analysis
ON Semiconductor disclosed 40 risk factors in its most recent earnings report. ON Semiconductor reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ON Semiconductor Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.42T | 33.16 | 111.66% | 0.14% | 70.68% | 109.57% | |
68 Neutral | $45.27B | 18.39 | 20.98% | 2.12% | 9.07% | 116.20% | |
67 Neutral | $31.60B | 50.49 | 7.45% | ― | -3.14% | 44.55% | |
67 Neutral | $29.59B | 38.50 | 6.07% | 0.22% | 1.40% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $49.69B | 104.21 | 2.66% | 0.70% | 10.06% | -27.68% | |
53 Neutral | $79.83B | 45.29 | 14.45% | 1.13% | 18.30% | 82.12% |
* Technology Sector Average
ON
ON Semiconductor
79.78
32.68
69.38%
ASX
ASE Technology Holding Co
37.59
27.65
278.32%
NVDA
Nvidia
217.55
35.73
19.65%
STM
STMicroelectronics
54.35
29.80
121.39%
UMC
United Micro
18.79
12.16
183.41%
GFS
GlobalFoundries Inc
50.05
18.48
58.52%
ON Semiconductor Corporate Events
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesM&A Transactions
ON Semiconductor to Acquire Synaptics in All-Stock Deal
Positive
Jun 25, 2026
On June 25, 2026, onsemi agreed to acquire Synaptics in an all‑stock deal valuing the target at about $7 billion, with Synaptics investors to receive 1.350 onsemi shares per Synaptics share and own roughly 12% of the combined company. The tr...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
ON Semiconductor Extends Executive Tenure, Shareholders Back Governance
Positive
May 18, 2026
ON Semiconductor’s former Power Solutions Group president, Simon Keeton, had previously stepped down from all officer roles effective March 9, 2026, with his final employment date initially expected on June 30, 2026. On May 14, 2026, the com...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
ON Semiconductor Issues 0% Convertible Notes for Capital Flexibility
Positive
May 12, 2026
On May 11, 2026, ON Semiconductor completed a private, unregistered offering of $1.5 billion in 0% convertible senior notes due 2031, fully guaranteed by certain U.S. subsidiaries and structured to mature on May 1, 2031 unless earlier converted, r...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
ON Semiconductor Prices $1.3 Billion Convertible Notes Offering
Positive
May 7, 2026
On May 6, 2026, onsemi priced a private offering of $1.3 billion in 0% Convertible Senior Notes due 2031, sold to qualified institutional buyers at a conversion premium of about 52.5% over its then share price. The issuance, which may increase by ...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
onsemi Announces $1.3 Billion Convertible Notes Offering
Neutral
May 6, 2026
On May 6, 2026, onsemi announced it was launching a private offering of $1.3 billion in Convertible Senior Notes due 2031, with an option for initial purchasers to buy up to an additional $200 million, in a Rule 144A transaction for qualified inst...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.