onsemi
ON
$78.33
+1.85%
ON Semiconductor Corp (onsemi) is a leading supplier of power semiconductors and image sensors, primarily serving the automotive and industrial markets. As the world's second-largest power chipmaker and the largest automotive image sensor supplier, onsemi holds a distinct competitive position in the semiconductor industry. The company is currently at the center of investor attention due to its strategic pivot toward high-growth applications like electric vehicles, autonomous driving, and industrial automation, as well as its recent $7 billion acquisition of Synaptics to expand into physical AI and edge inference. This acquisition, announced in July 2026, has sparked debate about its strategic fit and financial impact, with some analysts viewing the post-announcement stock dip as a buying opportunity while others remain cautious about integration risks and near-term margin dilution.…
ON
onsemi
$78.33
Related headlines
Investment Opinion: Should I buy ON Today?
Based on the data, ON Semiconductor is rated a Buy. The consensus analyst recommendation is 'Buy' with an average price target of $113.12, implying a 38.6% upside. The company's strategic pivot to AI and EV markets, combined with its strong balance sheet and free cash flow generation, supports a positive long-term outlook.
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ON 12-Month Price Forecast
The AI assessment is bullish with medium confidence. The company's strategic moves into AI and physical AI, combined with a reasonable forward valuation and strong analyst support, suggest upside potential. However, the decelerating revenue growth and recent net loss temper confidence. If the company can demonstrate accelerating growth and margin improvement in the next two quarters, the stance would be upgraded to high confidence. Conversely, if revenue growth turns negative or integration issues emerge, the stance would be downgraded to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on onsemi's 12-month outlook, with a consensus price target around $111.54 and implied upside of +42.4% versus the current price.
Average Target
$111.54
0 analysts
Implied Upside
+42.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$85 - $150
Analyst target range
ON Semiconductor is covered by 25 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 2.28 (where 1 is Strong Buy and 5 is Sell). The average price target is $113.12, implying a substantial 38.6% upside from the current price of $81.61. The distribution of ratings shows a bullish tilt, with 10 analysts rating it Buy or Outperform, 4 at Hold, and 1 at Sell, though the recent actions from firms like TD Cowen (Hold) and Cantor Fitzgerald (Neutral) suggest some caution. The high target of $150 implies a 83.8% upside, reflecting expectations of strong growth from AI and EV adoption, while the low target of $85 suggests a modest 4.2% upside, indicating that even the most bearish analyst sees limited downside from current levels.
Bulls vs Bears: ON Investment Factors
ON Semiconductor presents a compelling bull case driven by its strategic positioning in high-growth markets like electric vehicles and AI, strong analyst support with a consensus Buy rating, and a healthy balance sheet. However, the bear case is equally compelling, highlighted by decelerating revenue growth, a recent net loss, and a premium valuation that leaves little room for error. The most critical tension is whether the company can reignite growth through its Synaptics acquisition and AI initiatives to justify its premium multiple, or if the cyclical downturn in automotive and industrial markets will persist, leading to further earnings disappointment. Currently, the bull case has slightly stronger evidence given the analyst consensus and long-term growth prospects, but the near-term risks are substantial.
Bullish
- 38.6% Upside to Average Target: The average analyst price target is $113.12, implying a 38.6% upside from the current price of $81.61. Even the low target of $85 suggests a 4.2% upside, indicating limited downside risk per analysts.
- Strategic $7B Synaptics Acquisition: The acquisition of Synaptics expands onsemi's reach into physical AI and edge inference, positioning it for high-growth markets. Despite the post-announcement stock dip, analysts like The Motley Fool view it as a long-term buying opportunity.
- Strong 1-Year Relative Performance: ON stock is up 44.8% over the past year, significantly outperforming the S&P 500's 18.2% gain. This demonstrates strong momentum and market recognition of its growth potential.
- Healthy Balance Sheet with Low Debt: Debt-to-equity ratio is 0.45, and current ratio is 4.52, indicating strong liquidity and manageable leverage. This financial stability supports the company's ability to fund growth initiatives and weather cyclical downturns.
Bearish
- Revenue Growth Decelerating Sharply: Q1 2026 revenue growth was only 4.68% YoY, down from 8.9% in Q4 2025 and 5.6% in Q3 2025. This deceleration raises concerns about demand sustainability in automotive and industrial markets, which are facing inventory corrections.
- Negative Net Income in Q1 2026: The company reported a net loss of $33.4 million in Q1 2026, with EPS of -$0.08. This marks a significant deterioration from the profitable quarters in 2025, and the trailing P/E is not meaningful due to negative earnings.
- Premium Valuation vs. Industry: The price-to-sales ratio of 3.71x is well above the semiconductor industry average of ~2.5x. This premium implies the market expects above-average growth, leaving little room for disappointment.
- High Volatility and Drawdown Risk: With a beta of 2.01, the stock is highly sensitive to market swings. The 39.5% drawdown from the 52-week high of $134.92 to $81.61 illustrates the potential for significant losses in adverse conditions.
ON Technical Analysis
ON Semiconductor's stock has exhibited a robust long-term uptrend, with a 1-year price change of +44.8%, significantly outperforming the S&P 500's +18.2% over the same period. The current price of $81.61 sits at 60.5% of its 52-week range (between $44.56 low and $134.92 high), indicating the stock has pulled back considerably from its highs but remains well above its lows. This positioning suggests the stock is in a corrective phase within a broader uptrend, offering potential value for investors if the long-term growth narrative remains intact. The 52-week high of $134.92 was reached in June 2026, and the subsequent decline to $81.61 represents a 39.5% drawdown from that peak, highlighting the volatility inherent in this name.
Beta
—
—
Max Drawdown
-42.6%
Largest decline past year
52-Week Range
$45-$135
Price range past year
Annual Return
+66.7%
Cumulative gain past year
| Period | ON Return | S&P 500 |
|---|---|---|
| 1m | -14.0% | +2.8% |
| 3m | -24.1% | +4.2% |
| 6m | +20.1% | +11.3% |
| 1y | +66.7% | +21.5% |
| ytd | +38.1% | +12.7% |
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ON Fundamental Analysis
Revenue for the most recent quarter (Q1 2026) was $1,513.3 million, representing a 4.68% year-over-year growth, a notable deceleration from the 8.9% growth seen in Q4 2025 and the 5.6% growth in Q3 2025. The company's revenue trajectory has been choppy, with a dip in Q2 2025 to $1,468.7 million before recovering to $1,550.9 million in Q3 2025, but the latest quarter shows a slight sequential decline from Q4 2025's $1,530.1 million. Segment-wise, Power Solutions Group contributed $736.6 million, Analog Solutions Group $540.4 million, and Intelligent Sensing Group $236.3 million, with the power segment being the primary growth driver. The deceleration in revenue growth raises questions about the sustainability of the company's end-market demand, particularly in automotive and industrial sectors, which are cyclical and currently facing inventory corrections.
Quarterly Revenue
$1.5B
2026-04
Revenue YoY Growth
+4.7%
YoY Comparison
Gross Margin
38.5%
Latest Quarter
Free Cash Flow
$1.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ON Overvalued?
Given that ON Semiconductor's trailing twelve-month net income is negative (Q1 2026 net loss of $33.4 million), the price-to-earnings ratio is not meaningful, so I have selected the price-to-sales (PS) ratio as the primary valuation metric. The current PS ratio is 3.71x, which is a significant premium to the semiconductor industry average of approximately 2.5x, indicating the market is pricing in above-average growth expectations. The forward PE ratio of 18.79x suggests that analysts expect earnings to recover strongly, with the implied earnings yield of 5.3% reflecting optimism about the company's future profitability. The gap between the negative trailing earnings and the positive forward earnings highlights the market's belief in a sharp earnings rebound, driven by AI and EV demand, but also leaves little room for disappointment.
PE
186.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 11x~22x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
26.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. The company reported a net loss of $33.4 million in Q1 2026, a sharp reversal from the profitable quarters in 2025, indicating potential margin pressure or one-time charges. The gross margin declined to 32.3% in Q1 2026 from 45.2% in Q4 2024, reflecting increased costs or product mix shifts. Revenue growth has decelerated to 4.68% YoY, and the company's reliance on cyclical automotive and industrial markets exposes it to demand volatility. The debt-to-equity ratio of 0.45 is manageable, but the negative earnings and high capital expenditure requirements for the Synaptics integration could strain cash flows if growth does not materialize as expected.