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ON Semiconductor
(NASDAQ:ON)
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Rating:68Neutral
Price Target:
$87.00
▲(19.98% Upside)
Action:Reiterated
Date:10/02/26
The score is driven primarily by improving fundamentals and strong cash generation, reinforced by a bullish earnings-call outlook for margin expansion, utilization improvement, and AI data-center growth. These positives are tempered by a premium valuation (high P/E) and only moderate technical setup that suggests the longer-term trend is not fully restored yet. Corporate events add incremental upside potential via the progressing Synaptics transaction, but with execution and financing considerations.
Positive Factors
Strong Cash Generation
Strong free cash flow and cash conversion give onsemi internal funding for product development, capacity and strategic investments. This financial flexibility can support shareholder returns while reducing reliance on external capital through the next several quarters.
Negative Factors
Margins Remain Below Prior Peaks
Although profitability has recovered from the down-cycle, margins remain materially below recent peak levels. This indicates that the earnings recovery is incomplete and leaves future results dependent on additional mix, utilization and cost improvements rather than already-restored profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Strong free cash flow and cash conversion give onsemi internal funding for product development, capacity and strategic investments. This financial flexibility can support shareholder returns while reducing reliance on external capital through the next several quarters.
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
$30.18B
Dividend YieldN/A
Average Volume (3M)10.93M
Price to Earnings (P/E)49.1
Beta (1Y)1.78
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. Volume11,625,692
30 Day Avg. Volume10,925,651
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 Cap1.25
Enterprise Value/Revenue6.09
Enterprise Value/Gross Profit16.27
Enterprise Value/Ebitda24.48
Forecast
1Y Price Target
$105.84Price Target Upside45.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)3.2
Revenue Forecast (FY)$6.55B
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
ON Semiconductor makes money primarily by selling semiconductor products to original equipment manufacturers (OEMs) and their suppliers (including automotive Tier 1s) and to industrial and electronics customers, either directly or through distribu...
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 | 1.98B | 3.22B | 3.88B | 4.08B | 2.71B |
| EBITDA | 1.54B | 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
72.51
Price Trends
76.42
Positive
91.03
Negative
81.14
Negative
Market Momentum
1.67
Negative
49.62
Neutral
42.91
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 72.51 is below the 20-day moving average (MA) of 76.23, below the 50-day MA of 76.42, and below the 200-day MA of 81.14, indicating a neutral trend. The MACD of 1.67 indicates Negative momentum. The RSI at 49.62 is Neutral, neither overbought nor oversold. The STOCH value of 42.91 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 45 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $196.83B | 47.96 | 12.26% | 1.06% | 33.65% | 114.59% | |
72 Outperform | $57.37B | 19.31 | 28.05% | 1.78% | 8.77% | 39.24% | |
71 Outperform | $259.12B | 42.93 | 35.77% | 2.00% | 16.66% | 20.14% | |
68 Neutral | $30.18B | 49.07 | 8.38% | ― | -3.14% | 44.55% | |
63 Neutral | $41.02B | 104.68 | 6.90% | 2.41% | 20.93% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $46.58B | 99.16 | 2.66% | 0.69% | 10.06% | -27.68% |
* Technology Sector Average
ON
ON Semiconductor
77.53
27.42
54.72%
ADI
Analog Devices
406.19
174.42
75.25%
MCHP
Microchip
75.55
12.80
20.41%
NXPI
NXP Semiconductors
227.52
14.58
6.85%
STM
STMicroelectronics
52.06
23.48
82.17%
TXN
Texas Instruments
283.74
113.05
66.23%
ON Semiconductor Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
onsemi Restructures Synaptics Acquisition into All-Cash Deal
Positive
Oct 1, 2026
On October 1, 2026, onsemi and Synaptics amended their June 25, 2026 merger agreement after Synaptics received an unsolicited competing proposal, restructuring the deal as an all‑cash acquisition at $123 per share, valuing Synaptics at about...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
onsemi Gains FTC Clearance in Synaptics Merger Process
Positive
Aug 13, 2026
On June 25, 2026, onsemi entered into a Merger Agreement under which its wholly owned subsidiary Sonic Acquisition Corp. will merge with Synaptics, leaving Synaptics as a wholly owned onsemi unit if the deal is completed. The transaction is subjec...
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.