Overall ON gets a fundamental rating of 6 out of 10. We evaluated ON against 113 industry peers in the Semiconductors & Semiconductor Equipment industry. ON gets an excellent profitability rating and is at the same time showing great financial health properties. ON has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ON had positive earnings in the past year.
In the past year ON had a positive cash flow from operations.
Each year in the past 5 years ON has been profitable.
ON had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

ON has a Return On Assets (2.45%) which is comparable to the rest of the industry.
With a Return On Equity value of 4.04%, ON perfoms like the industry average, outperforming 56.64% of the companies in the same industry.
The Return On Invested Capital of ON (6.79%) is better than 73.45% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ON is significantly above the industry average of 10.75%.
The 3 year average ROIC (19.04%) for ON is well above the current ROIC(6.79%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	2.45%
ROE	4.04%
ROIC	6.79%

ROA(3y)14.52%

ROA(5y)11.35%

ROE(3y)25.56%

ROE(5y)21.06%

ROIC(3y)19.04%

ROIC(5y)15.34%

1.3 Margins

ON has a Profit Margin of 5.16%. This is comparable to the rest of the industry: ON outperforms 57.52% of its industry peers.
ON's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 15.06%, ON is doing good in the industry, outperforming 74.34% of the companies in the same industry.
ON's Operating Margin has improved in the last couple of years.
The Gross Margin of ON (35.75%) is worse than 61.95% of its industry peers.
In the last couple of years the Gross Margin of ON has grown nicely.

		Industry Rank	Sector Rank
OM	15.06%
PM (TTM)	5.16%
GM	35.75%

OM growth 3Y9.94%

OM growth 5Y18.56%

PM growth 3Y14.02%

PM growth 5Y42.07%

GM growth 3Y4.08%

GM growth 5Y4.89%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ON is creating value.
ON has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ON has more shares outstanding
Compared to 1 year ago, ON has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 5.03 indicates that ON is not in any danger for bankruptcy at the moment.
ON has a Altman-Z score (5.03) which is in line with its industry peers.
The Debt to FCF ratio of ON is 2.47, which is a good value as it means it would take ON, 2.47 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ON (2.47) is better than 66.37% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that ON is not too dependend on debt financing.
The Debt to Equity ratio of ON (0.43) is worse than 67.26% of its industry peers.
Even though the debt/equity ratio score it not favorable for ON, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.43
Debt/FCF	2.47
Altman-Z	5.03

ROIC/WACC0.65

WACC10.42%

2.3 Liquidity

ON has a Current Ratio of 5.23. This indicates that ON is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of ON (5.23) is better than 74.34% of its industry peers.
ON has a Quick Ratio of 3.54. This indicates that ON is financially healthy and has no problem in meeting its short term obligations.
ON's Quick ratio of 3.54 is fine compared to the rest of the industry. ON outperforms 68.14% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	5.23
Quick Ratio	3.54

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for ON have decreased strongly by -37.85% in the last year.
The Earnings Per Share has been growing by 21.88% on average over the past years. This is a very strong growth
Looking at the last year, ON shows a very negative growth in Revenue. The Revenue has decreased by -16.13% in the last year.
ON shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.12% yearly.

EPS 1Y (TTM)-37.85%

EPS 3Y10.62%

EPS 5Y21.88%

EPS Q2Q%-36.36%

Revenue 1Y (TTM)-16.13%

Revenue growth 3Y1.67%

Revenue growth 5Y5.12%

Sales Q2Q%-11.98%

3.2 Future

The Earnings Per Share is expected to grow by 11.23% on average over the next years. This is quite good.
Based on estimates for the next years, ON will show a small growth in Revenue. The Revenue will grow by 3.96% on average per year.

EPS Next Y-39.69%

EPS Next 2Y-13.17%

EPS Next 3Y2.09%

EPS Next 5Y11.23%

Revenue Next Year-15.68%

Revenue Next 2Y-5.76%

Revenue Next 3Y-0.83%

Revenue Next 5Y3.96%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 23.30, which indicates a rather expensive current valuation of ON.
ON's Price/Earnings ratio is rather cheap when compared to the industry. ON is cheaper than 88.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, ON is valued at the same level.
With a Price/Forward Earnings ratio of 20.66, ON is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ON is valued cheaply inside the industry as 85.84% of the companies are valued more expensively.
ON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	23.3
Fwd PE	20.66

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ON is valued cheaply inside the industry as 82.30% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ON is valued cheaply inside the industry as 92.04% of the companies are valued more expensively.