Investors should take note of NASDAQ:ON, a growth stock that remains attractively priced.

Last update: Oct 23, 2023

ON SEMICONDUCTOR (NASDAQ:ON) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:ON is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Unpacking NASDAQ:ON's Growth Rating

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:ON scores a 7 out of 10:

The Earnings Per Share has grown by an nice 17.04% over the past year.
Measured over the past years, ON shows a very strong growth in Earnings Per Share. The EPS has been growing by 34.97% on average per year.
Looking at the last year, ON shows a quite strong growth in Revenue. The Revenue has grown by 9.61% in the last year.
The Revenue has been growing by 8.48% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 14.51% on average over the next years. This is quite good.
Based on estimates for the next years, ON will show a quite strong growth in Revenue. The Revenue will grow by 9.48% on average per year.

Evaluating Valuation: NASDAQ:ON

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:ON, the assigned 5 reflects its valuation:

71.70% of the companies in the same industry are more expensive than ON, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.03. ON is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio, ON is valued a bit cheaper than the industry average as 77.36% of the companies are valued more expensively.
ON's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 18.58.
Based on the Enterprise Value to EBITDA ratio, ON is valued a bit cheaper than the industry average as 74.53% of the companies are valued more expensively.
67.92% of the companies in the same industry are more expensive than ON, based on the Price/Free Cash Flow ratio.
The excellent profitability rating of ON may justify a higher PE ratio.

Health Assessment of NASDAQ:ON

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:ON has earned a 5 out of 10:

ON has an Altman-Z score of 6.08. This indicates that ON is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.08, ON is in the better half of the industry, outperforming 69.81% of the companies in the same industry.
ON has a debt to FCF ratio of 3.06. This is a good value and a sign of high solvency as ON would need 3.06 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.06, ON is doing good in the industry, outperforming 64.15% of the companies in the same industry.
ON has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
ON has a Current Ratio of 2.39. This indicates that ON is financially healthy and has no problem in meeting its short term obligations.

Profitability Assessment of NASDAQ:ON

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:ON was assigned a score of 8 for profitability:

ON has a Return On Assets of 15.31%. This is in the better half of the industry: ON outperforms 79.25% of its industry peers.
ON has a better Return On Equity (27.98%) than 83.96% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.27%, ON belongs to the top of the industry, outperforming 90.57% of the companies in the same industry.
The last Return On Invested Capital (22.27%) for ON is above the 3 year average (14.18%), which is a sign of increasing profitability.
ON has a better Profit Margin (23.41%) than 79.25% of its industry peers.
In the last couple of years the Profit Margin of ON has grown nicely.
ON has a Operating Margin of 32.66%. This is amongst the best in the industry. ON outperforms 87.74% of its industry peers.
ON's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of ON has grown nicely.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of ON

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.