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In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating ON Semiconductor (NASDAQ:ON) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Onsemi is a supplier of power semiconductors and sensors focused on the automotive and industrial markets. Onsemi is the second-largest power chipmaker in the world and the largest supplier of image sensors to the automotive market. While the firm used to be highly vertically integrated, it now pursues a hybrid manufacturing strategy for flexible capacity. Onsemi is pivoting to focus on emerging applications like electric vehicles, autonomous vehicles, industrial automation, and renewable energy.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| ON Semiconductor Corp | 14.93 | 3.87 | 3.98 | 5.7% | $0.71 | $0.85 | -4.95% |
| NVIDIA Corp | 77.52 | 52.93 | 37.86 | 32.23% | $14.56 | $16.79 | 265.28% |
| Taiwan Semiconductor Manufacturing Co Ltd | 28.97 | 6.94 | 11.23 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 51.85 | 9.20 | 15.67 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 238.36 | 4.73 | 11.77 | 0.22% | $0.9 | $2.56 | -11.27% |
| Qualcomm Inc | 25.85 | 8.84 | 6 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 30.38 | 10.46 | 10.64 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 32.81 | 1.28 | 2.44 | -0.36% | $1.83 | $5.22 | -17.41% |
| ARM Holdings PLC | 380.52 | 21.68 | 35.65 | 4.35% | $0.06 | $0.89 | 12.62% |
| Analog Devices Inc | 38.23 | 2.99 | 9.31 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 27.11 | 7.66 | 6.77 | 2.25% | $0.39 | $0.79 | -24.91% |
| STMicroelectronics NV | 10.68 | 2.19 | 2.38 | 3.04% | $1.06 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 87.01 | 16.81 | 19.51 | 4.45% | $0.1 | $0.25 | 1.51% |
| GLOBALFOUNDRIES Inc | 33.51 | 2.66 | 4.23 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 21.03 | 2.50 | 1.26 | 1.94% | $23.55 | $20.87 | 1.46% |
| First Solar Inc | 20.71 | 3.06 | 5.96 | 5.38% | $0.36 | $0.35 | 15.58% |
| United Microelectronics Corp | 12 | 1.74 | 2.91 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 17.63 | 2.36 | 3.32 | 2.91% | $0.31 | $0.42 | -9.29% |
| Lattice Semiconductor Corp | 46.77 | 14.70 | 14.67 | 2.15% | $0.03 | $0.1 | -23.6% |
| Universal Display Corp | 37.64 | 5.53 | 13.49 | 3.86% | $0.07 | $0.13 | 26.67% |
| MACOM Technology Solutions Holdings Inc | 113.31 | 6.95 | 11.43 | 1.45% | $0.04 | $0.1 | 6.98% |
| Rambus Inc | 17.67 | 6.30 | 13.78 | 3.24% | $0.05 | $0.09 | 3.61% |
| Average | 64.26 | 9.12 | 11.44 | 4.67% | $24.13 | $18.95 | 10.79% |
By analyzing ON Semiconductor, we can infer the following trends:
At 14.93, the stock's Price to Earnings ratio is 0.23x less than the industry average, suggesting favorable growth potential.
The current Price to Book ratio of 3.87, which is 0.42x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
The Price to Sales ratio is 3.98, which is 0.35x the industry average. This suggests a possible undervaluation based on sales performance.
The company has a higher Return on Equity (ROE) of 5.7%, which is 1.03% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $710 Million is 0.03x below the industry average, suggesting potential lower profitability or financial challenges.
The gross profit of $850 Million is 0.04x below that of its industry, suggesting potential lower revenue after accounting for production costs.
The company's revenue growth of -4.95% is significantly lower compared to the industry average of 10.79%. This indicates a potential fall in the company's sales performance.
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing ON Semiconductor against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
ON Semiconductor is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.41.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
The low P/E, P/B, and P/S ratios suggest that ON Semiconductor may be undervalued compared to its industry peers. However, the high ROE indicates strong profitability relative to its equity. The low EBITDA and gross profit figures may indicate potential operational challenges. Additionally, the low revenue growth rate raises concerns about the company's ability to increase its top line in the future.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: ON
