Taking everything into account, ON scores 6 out of 10 in our fundamental rating. ON was compared to 113 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 decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ON was profitable.
ON had a positive operating cash flow in the past year.
Each year in the past 5 years ON has been profitable.
In the past 5 years ON always reported a positive cash flow from operatings.

1.2 Ratios

ON has a Return On Assets (2.45%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 4.04%, ON is in line with its industry, outperforming 56.64% of the companies in the same industry.
ON has a better Return On Invested Capital (6.79%) than 73.45% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ON is significantly above the industry average of 10.75%.
The last Return On Invested Capital (6.79%) for ON is well below the 3 year average (19.04%), which needs to be investigated, but indicates that ON had better years and this may not be a problem.

		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.
In the last couple of years the Profit Margin of ON has grown nicely.
ON has a better Operating Margin (15.06%) than 74.34% of its industry peers.
In the last couple of years the Operating Margin of ON has grown nicely.
ON has a worse Gross Margin (35.75%) 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

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ON is creating value.
ON has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ON has been increased compared to 5 years ago.
ON has a better debt/assets ratio than last year.

2.2 Solvency

ON has an Altman-Z score of 4.98. This indicates that ON is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 4.98, ON perfoms like the industry average, outperforming 56.64% of the companies in the same industry.
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.
ON has a Debt to FCF ratio of 2.47. This is in the better half of the industry: ON outperforms 66.37% of its industry peers.
ON has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.43, ON is doing worse than 67.26% of the companies in the same industry.
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	0.43
Debt/FCF	2.47
Altman-Z	4.98

ROIC/WACC0.65

WACC10.4%

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.
A Quick Ratio of 3.54 indicates that ON has no problem at all paying 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

ON shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.85%.
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 -16.13%.
The Revenue has been growing slightly by 5.12% on average over the past years.

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

Based on estimates for the next years, ON will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.23% on average per year.
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-5.74%

Revenue Next 3Y-0.81%

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

ON is valuated rather expensively with a Price/Earnings ratio of 23.30.
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.
ON's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
The Price/Forward Earnings ratio is 20.66, which indicates a rather expensive current valuation of ON.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ON indicates a rather cheap valuation: ON is cheaper than 85.84% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, ON is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	23.3
Fwd PE	20.66

4.2 Price Multiples

ON's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ON is cheaper than 81.42% of the companies in the same industry.
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.