ON SEMICONDUCTOR (ON) Stock Fundamental Analysis
NASDAQ:ON - Nasdaq - US6821891057 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ON. ON was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. ON scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ON has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
ON had positive earnings in the past year.
ON had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 4.78%, ON is in the better half of the industry, outperforming 64.55% of the companies in the same industry.
ON has a Return On Equity of 7.89%. This is in the better half of the industry: ON outperforms 65.45% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.62%, ON is in the better half of the industry, outperforming 79.09% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ON is significantly above the industry average of 10.58%.
The 3 year average ROIC (19.04%) for ON is well above the current ROIC(9.62%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 7.89% | ||
| ROIC | 9.62% |
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
The Profit Margin of ON (9.51%) is better than 63.64% of its industry peers.
In the last couple of years the Profit Margin of ON has grown nicely.
With a decent Operating Margin value of 20.11%, ON is doing good in the industry, outperforming 77.27% of the companies in the same industry.
In the last couple of years the Operating Margin of ON has grown nicely.
ON has a Gross Margin of 39.85%. This is in the lower half of the industry: ON underperforms 61.82% of its industry peers.
In the last couple of years the Gross Margin of ON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.11% | ||
| PM (TTM) | 9.51% | ||
| GM | 39.85% |
OM growth 3Y9.94%
OM growth 5Y18.56%
PM growth 3Y14.02%
PM growth 5Y42.07%
GM growth 3Y4.08%
GM growth 5Y4.89%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ON is still creating some value.
The number of shares outstanding for ON has been reduced compared to 1 year ago.
ON has more shares outstanding than it did 5 years ago.
ON has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.82 indicates that ON is not in any danger for bankruptcy at the moment.
ON's Altman-Z score of 4.82 is fine compared to the rest of the industry. ON outperforms 61.82% of its industry peers.
ON has a debt to FCF ratio of 2.40. This is a good value and a sign of high solvency as ON would need 2.40 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.40, ON is in the better half of the industry, outperforming 65.45% of the companies in the same industry.
ON has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.42, ON is not doing good in the industry: 68.18% of the companies in the same industry are doing better.
Although ON does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.4 | ||
| Altman-Z | 4.82 |
ROIC/WACC0.88
WACC10.88%
2.3 Liquidity
A Current Ratio of 4.95 indicates that ON has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.95, ON is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
A Quick Ratio of 3.32 indicates that ON has no problem at all paying its short term obligations.
ON has a Quick ratio of 3.32. This is in the better half of the industry: ON outperforms 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.95 | ||
| Quick Ratio | 3.32 |
3. Growth
3.1 Past
ON shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -31.68%.
ON shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.88% yearly.
ON shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -18.28%.
The Revenue has been growing slightly by 5.12% on average over the past years.
EPS 1Y (TTM)-31.68%
EPS 3Y10.62%
EPS 5Y21.88%
EPS Q2Q%-49.07%
Revenue 1Y (TTM)-18.28%
Revenue growth 3Y1.67%
Revenue growth 5Y5.12%
Sales Q2Q%-22.39%
3.2 Future
ON is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.60% yearly.
ON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.88% yearly.
EPS Next Y-41.22%
EPS Next 2Y-9.71%
EPS Next 3Y6.07%
EPS Next 5Y9.6%
Revenue Next Year-16.82%
Revenue Next 2Y-4.44%
Revenue Next 3Y0.76%
Revenue Next 5Y2.88%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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.
4. Valuation
4.1 Price/Earnings Ratio
ON is valuated correctly with a Price/Earnings ratio of 16.41.
Based on the Price/Earnings ratio, ON is valued cheaply inside the industry as 85.45% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.45. ON is valued slightly cheaper when compared to this.
ON is valuated rather expensively with a Price/Forward Earnings ratio of 17.45.
Based on the Price/Forward Earnings ratio, ON is valued a bit cheaper than 79.09% of the companies in the same industry.
ON is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.41 | ||
| Fwd PE | 17.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ON is valued cheaply inside the industry as 86.36% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ON is valued cheaper than 89.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.87 | ||
| EV/EBITDA | 11.9 |
4.3 Compensation for Growth
The excellent profitability rating of ON may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.75
EPS Next 2Y-9.71%
EPS Next 3Y6.07%
5. Dividend
5.1 Amount
No dividends for ON!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
56.6
+0.65 (+1.16%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners105.41%
Inst Owner Change-0.86%
Ins Owners0.33%
Ins Owner Change4.18%
Market Cap23.65B
Analysts74.15
Price Target51.59 (-8.85%)
Short Float %8.11%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.11%
Min EPS beat(2)-5.32%
Max EPS beat(2)5.53%
EPS beat(4)2
Avg EPS beat(4)0.1%
Min EPS beat(4)-5.32%
Max EPS beat(4)5.53%
EPS beat(8)6
Avg EPS beat(8)1.1%
EPS beat(12)10
Avg EPS beat(12)2.25%
EPS beat(16)14
Avg EPS beat(16)5.76%
Revenue beat(2)1
Avg Revenue beat(2)-2.38%
Min Revenue beat(2)-4.89%
Max Revenue beat(2)0.12%
Revenue beat(4)1
Avg Revenue beat(4)-2.42%
Min Revenue beat(4)-4.89%
Max Revenue beat(4)0.12%
Revenue beat(8)2
Avg Revenue beat(8)-1.89%
Revenue beat(12)4
Avg Revenue beat(12)-1.42%
Revenue beat(16)5
Avg Revenue beat(16)-1.21%
PT rev (1m)4.84%
PT rev (3m)-15.81%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.86%
EPS NY rev (1m)0.47%
EPS NY rev (3m)-10.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.05%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)-1.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.41 | ||
| Fwd PE | 17.45 | ||
| P/S | 3.55 | ||
| P/FCF | 16.87 | ||
| P/OCF | 11.77 | ||
| P/B | 2.95 | ||
| P/tB | 3.89 | ||
| EV/EBITDA | 11.9 |
EPS(TTM)3.45
EY6.1%
EPS(NY)3.24
Fwd EY5.73%
FCF(TTM)3.36
FCFY5.93%
OCF(TTM)4.81
OCFY8.5%
SpS15.95
BVpS19.22
TBVpS14.55
PEG (NY)N/A
PEG (5Y)0.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 7.89% | ||
| ROCE | 11.19% | ||
| ROIC | 9.62% | ||
| ROICexc | 12.85% | ||
| ROICexgc | 16.43% | ||
| OM | 20.11% | ||
| PM (TTM) | 9.51% | ||
| GM | 39.85% | ||
| FCFM | 21.04% |
ROA(3y)14.52%
ROA(5y)11.35%
ROE(3y)25.56%
ROE(5y)21.06%
ROIC(3y)19.04%
ROIC(5y)15.34%
ROICexc(3y)25.65%
ROICexc(5y)20.08%
ROICexgc(3y)33.75%
ROICexgc(5y)27.59%
ROCE(3y)22.16%
ROCE(5y)17.85%
ROICexcg growth 3Y-8.84%
ROICexcg growth 5Y5.63%
ROICexc growth 3Y-1.27%
ROICexc growth 5Y11.96%
OM growth 3Y9.94%
OM growth 5Y18.56%
PM growth 3Y14.02%
PM growth 5Y42.07%
GM growth 3Y4.08%
GM growth 5Y4.89%
F-Score5
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 2.4 | ||
| Debt/EBITDA | 1.69 | ||
| Cap/Depr | 92.61% | ||
| Cap/Sales | 9.12% | ||
| Interest Coverage | 21.76 | ||
| Cash Conversion | 100.66% | ||
| Profit Quality | 221.29% | ||
| Current Ratio | 4.95 | ||
| Quick Ratio | 3.32 | ||
| Altman-Z | 4.82 |
F-Score5
WACC10.88%
ROIC/WACC0.88
Cap/Depr(3y)184.74%
Cap/Depr(5y)142.8%
Cap/Sales(3y)13.78%
Cap/Sales(5y)11.57%
Profit Quality(3y)59.82%
Profit Quality(5y)95.66%
High Growth Momentum
Growth
EPS 1Y (TTM)-31.68%
EPS 3Y10.62%
EPS 5Y21.88%
EPS Q2Q%-49.07%
EPS Next Y-41.22%
EPS Next 2Y-9.71%
EPS Next 3Y6.07%
EPS Next 5Y9.6%
Revenue 1Y (TTM)-18.28%
Revenue growth 3Y1.67%
Revenue growth 5Y5.12%
Sales Q2Q%-22.39%
Revenue Next Year-16.82%
Revenue Next 2Y-4.44%
Revenue Next 3Y0.76%
Revenue Next 5Y2.88%
EBIT growth 1Y-46.88%
EBIT growth 3Y11.77%
EBIT growth 5Y24.63%
EBIT Next Year-12.76%
EBIT Next 3Y9.27%
EBIT Next 5Y12.19%
FCF growth 1Y2.88%
FCF growth 3Y-2.05%
FCF growth 5Y82.37%
OCF growth 1Y-21.59%
OCF growth 3Y2.27%
OCF growth 5Y22.37%