onsemi
ON
$87.37
-0.85%
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 provider, onsemi holds a distinct competitive position in the semiconductor industry. The current investor narrative centers on the company's strategic pivot toward high-growth applications like electric vehicles, autonomous driving, and industrial automation, with recent attention focused on its $7 billion acquisition of Synaptics to expand into physical AI and edge inference. This transformative deal has sparked debate about near-term execution risks versus long-term positioning in the AI-driven semiconductor supercycle.…
ON
onsemi
$87.37
Related headlines
ON 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on onsemi's 12-month outlook, with a consensus price target around $113.52 and implied upside of +29.9% versus the current price.
Average Target
$113.52
0 analysts
Implied Upside
+29.9%
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' (mean rating 2.28 on a 1-5 scale where 1 is Strong Buy). The average price target is $113.52, implying approximately +30% upside from the current price of $87.37. The distribution leans bullish, with recent ratings from firms like B. Riley Securities (Buy), Needham (Buy), and Evercore ISI (Outperform) reinforcing positive sentiment, while TD Cowen and Stifel maintain Hold ratings.
The target range spans from $85.00 (low) to $150.00 (high), a spread of $65 or 76% of the current price, indicating high uncertainty. The high target of $150 assumes successful integration of the Synaptics acquisition, margin expansion from AI-driven demand, and multiple expansion. The low target of $85 reflects risks of continued margin compression, competitive pressure, or a broader semiconductor downturn. Recent institutional ratings show no downgrades, with firms like Mizuho and Susquehanna reiterating positive stances, suggesting analysts are largely constructive despite the recent pullback. The wide target spread underscores the binary nature of the investment thesis—success could yield substantial upside, while failure could lead to further downside.
Bulls vs Bears: ON Investment Factors
ON Semiconductor presents a high-risk, high-reward opportunity. The bull case rests on a transformative AI acquisition, strong free cash flow, and a discounted P/S multiple relative to peers, with 30% upside to the average analyst target. The bear case is driven by a recent net loss, margin compression, sequential revenue decline, and extreme volatility. The single most important tension is whether the Synaptics acquisition will drive a growth and margin inflection or exacerbate near-term financial strain. Currently, the bearish evidence from Q1 earnings is more immediate, but the long-term strategic pivot and analyst support tilt the balance toward a cautiously bullish stance for patient investors.
Bullish
- 30% Upside to Analyst Target: The average analyst price target is $113.52, implying ~30% upside from the current $87.37. With 25 analysts and a consensus Buy rating (mean 2.28), the Street sees significant near-term value.
- Strategic Synaptics AI Acquisition: The $7 billion Synaptics deal positions ON in physical AI and edge inference, a high-growth market. Recent news highlights this as a transformative move that could drive long-term revenue acceleration beyond the current 4.68% YoY growth.
- Strong Free Cash Flow Generation: TTM free cash flow stands at $1.453 billion, providing ample capacity for the $345.7 million in Q1 buybacks and debt reduction. This cash generation supports shareholder returns even during earnings volatility.
- Attractive P/S Discount to Peers: At a P/S of 3.71x, ON trades at a ~30-40% discount to the semiconductor industry average of 5-6x. This suggests the market is pricing in execution risks that may be overstated relative to the company's sales trajectory.
Bearish
- Q1 Net Loss and Margin Compression: ON swung to a net loss of -$33.4 million in Q1 2026 from a $181.8 million profit in Q4 2025. Gross margin fell to 38.53% from 34.92% QoQ, and operating margin turned negative at -3.53%, signaling severe near-term profitability pressure.
- High Valuation on Trailing Earnings: The trailing P/E of 186.72x is distorted by depressed earnings but still reflects extreme valuation if profitability does not recover. The forward P/E of 20.13x implies a sharp rebound that may not materialize if margin headwinds persist.
- Revenue Growth Deceleration: While Q1 revenue grew 4.68% YoY, it declined sequentially from $1.530B in Q4 2025 and $1.551B in Q3 2025. This deceleration suggests near-term demand softness in automotive and industrial markets.
- High Beta and Recent Sharp Decline: With a beta of 2.012, ON is twice as volatile as the market. The stock fell -22.63% in the past month, underperforming the S&P 500 by -22.94%, indicating elevated downside risk in a macro downturn.
ON Technical Analysis
ON Semiconductor is in a volatile uptrend over the past year, with a 1-year price change of +47.06%, significantly outperforming the S&P 500's +18.35%. The current price of $87.37 sits at 47.5% of its 52-week range ($44.56 to $134.92), indicating the stock has pulled back substantially from its highs but remains well above its lows. This positioning suggests the stock is in a corrective phase within a broader uptrend, offering a potential entry point if support holds, but also reflecting the risk of further downside if the downtrend accelerates.
Short-term momentum has turned sharply negative, with a 1-month price change of -22.63% and a 3-month change of +5.25%, creating a divergence from the strong 1-year uptrend. The 1-month decline is particularly severe relative to the S&P 500's +0.31% gain over the same period, resulting in a relative strength of -22.94%. This divergence could signal a temporary pullback within a secular uptrend or the start of a deeper correction, depending on whether the stock can stabilize above key support levels.
The stock's 52-week low of $44.56 provides a critical support level, while the 52-week high of $134.92 represents major resistance. A breakdown below $85 (near the low analyst target) would signal further weakness, while a recovery above $100 would indicate renewed bullish momentum. With a beta of 2.012, ON is roughly twice as volatile as the S&P 500, meaning it amplifies market moves—a factor that demands careful position sizing and risk management, especially given the recent sharp decline.
Beta
2.01
2.01x market volatility
Max Drawdown
-34.8%
Largest decline past year
52-Week Range
$45-$135
Price range past year
Annual Return
+47.1%
Cumulative gain past year
| Period | ON Return | S&P 500 |
|---|---|---|
| 1m | -22.6% | -0.5% |
| 3m | +5.3% | +4.9% |
| 6m | +44.8% | +9.7% |
| 1y | +47.1% | +18.4% |
| ytd | +54.1% | +9.0% |
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ON Fundamental Analysis
Revenue has shown modest growth, with the most recent quarter (Q1 2026) reporting $1.513 billion, up 4.68% year-over-year from $1.446 billion in Q1 2025. However, the trajectory is uneven: revenue declined sequentially from $1.530 billion in Q4 2025 and $1.551 billion in Q3 2025, indicating a deceleration. Segment data reveals Power Solutions Group ($736.6M) as the largest contributor, followed by Analog Solutions ($540.4M) and Intelligent Sensing ($236.3M). The growth is being driven by automotive and industrial demand, but the sequential decline raises questions about near-term momentum.
The company swung to a net loss of -$33.4 million in Q1 2026 from a net income of $181.8 million in Q4 2025, with gross margin compressing to 38.53% from 34.92% in the prior quarter. Operating margin turned negative at -3.53%, compared to +16.53% in Q4 2025, reflecting higher costs and restructuring charges. The trailing twelve-month net margin is a thin 2.02%, well below the industry average for profitable semiconductor firms, signaling that profitability is under pressure despite revenue growth.
Balance sheet health is mixed: the debt-to-equity ratio is a manageable 0.45, and the current ratio of 4.52 indicates strong liquidity. Free cash flow (TTM) stands at $1.453 billion, providing ample cushion for capital returns—the company repurchased $345.7 million in stock in Q1 2026 alone. However, ROE is a low 1.58%, reflecting the recent net loss and elevated equity base. The company generates sufficient cash to fund internal growth, but the negative net income in Q1 2026 is a red flag that warrants monitoring.
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 net income was negative in the most recent quarter, the trailing P/E of 186.72x is distorted and not meaningful. Therefore, we lead with the price-to-sales (P/S) ratio of 3.71x, which is more appropriate for a company with uneven profitability. The forward P/E of 20.13x implies the market expects a sharp earnings recovery, with the gap between trailing and forward multiples reflecting optimism about a return to profitability.
Compared to the semiconductor industry average P/S of approximately 5-6x, ON's 3.71x represents a discount of roughly 30-40%, suggesting the stock is undervalued relative to peers on a sales basis. However, the company's gross margin of 32.29% is below the industry median of ~45%, which partially justifies the discount. The EV/Sales multiple of 5.84x is also below the sector average, indicating the market is pricing in execution risks related to the Synaptics acquisition and margin compression.
Historically, ON's trailing P/E has ranged from 11x to 187x over the past five years, with the current 186.72x near the top of that band—a reflection of depressed earnings rather than exuberant valuation. The P/S ratio of 3.71x is near the lower end of its historical range (3.5x to 19.5x), suggesting the stock is attractively priced relative to its own sales history. This combination of low P/S and high P/E indicates that the market is pricing in a significant earnings rebound, making the stock a potential value play if the turnaround materializes.
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 & Operational Risks: ON's Q1 2026 net loss of -$33.4 million and negative operating margin of -3.53% highlight acute profitability risk. The company's gross margin compression from 45.2% in Q4 2024 to 38.5% in Q1 2026 reflects cost pressures and restructuring charges. With a debt-to-equity ratio of 0.45, leverage is manageable, but the low ROE of 1.58% indicates inefficient capital deployment. Revenue concentration in automotive and industrial markets (over 70% of sales) creates vulnerability to cyclical downturns in these sectors.
Market & Competitive Risks: ON's beta of 2.012 implies significant macro sensitivity, and the recent -22.63% monthly decline underscores downside volatility. The stock trades at a P/S of 3.71x, a discount to peers, but this could compress further if the semiconductor cycle turns. Competitive threats from larger players like Infineon and Texas Instruments, which have stronger margins, could pressure ON's market share. The Synaptics acquisition integration risk is heightened by the $7 billion price tag, which could strain balance sheet flexibility if synergies are delayed.
Worst-Case Scenario: A prolonged downturn in automotive and industrial demand, combined with failed Synaptics integration leading to further margin erosion, could drive ON to its 52-week low of $44.56, representing a -49% decline from the current $87.37. In this scenario, the stock would trade at a P/S of ~1.9x, reflecting deep cyclical pessimism. The realistic downside from current levels is approximately -35% to $56.80, the low analyst target, implying a loss of $30.57 per share.