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 gets an excellent profitability rating and is at the same time showing great financial health properties. ON is not valued too expensively and it also shows a decent 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.
ON had a positive operating cash flow in the past year.
ON had positive earnings in each of the past 5 years.
In the past 5 years ON always reported a positive cash flow from operatings.

1.2 Ratios

With a Return On Assets value of 2.45%, ON perfoms like the industry average, outperforming 55.75% of the companies in the same industry.
ON's Return On Equity of 4.04% is in line compared to the rest of the industry. ON outperforms 56.64% of its industry peers.
With a decent Return On Invested Capital value of 6.79%, ON is doing good in the industry, outperforming 72.57% 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 10.85%.
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's Operating Margin of 15.06% is fine compared to the rest of the industry. ON outperforms 74.34% of its industry peers.
ON's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 35.75%, ON is doing worse than 61.95% of the companies in the same industry.
ON's Gross Margin has improved in the last couple of years.

		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

ON has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, ON has less shares outstanding
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 4.88 indicates that ON is not in any danger for bankruptcy at the moment.
ON's Altman-Z score of 4.88 is in line compared to the rest of the industry. ON outperforms 55.75% of its industry peers.
ON has a debt to FCF ratio of 2.47. This is a good value and a sign of high solvency as ON would need 2.47 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.47, ON is doing good in the industry, outperforming 65.49% of the companies in the same industry.
ON has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
ON has a Debt to Equity ratio of 0.43. This is in the lower half of the industry: ON underperforms 68.14% 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	4.88

ROIC/WACC0.65

WACC10.51%

2.3 Liquidity

A Current Ratio of 5.23 indicates that ON has no problem at all paying its short term obligations.
ON has a Current ratio of 5.23. This is in the better half of the industry: ON outperforms 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 has a Quick ratio of 3.54. This is in the better half 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%.
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.
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

ON is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.23% yearly.
The Revenue is expected to grow by 3.96% on average over the next years.

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

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

ON is valuated rather expensively with a Price/Earnings ratio of 22.52.
Compared to the rest of the industry, the Price/Earnings ratio of ON indicates a rather cheap valuation: ON is cheaper than 88.50% of the companies listed in the same industry.
ON is valuated rather cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 19.96, ON is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ON is valued cheaper than 85.84% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.57. ON is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	22.52
Fwd PE	19.96

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ON is valued cheaper than 83.19% of the companies in the same industry.
ON's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ON is cheaper than 92.04% of the companies in the same industry.