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In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing ON Semiconductor (NASDAQ:ON) alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 | 14.92 | 3.87 | 3.98 | 5.7% | $0.71 | $0.85 | -4.95% |
| NVIDIA Corp | 64.15 | 54.88 | 34.27 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 29.15 | 6.98 | 11.30 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 49.37 | 8.76 | 14.92 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 241.88 | 4.80 | 11.95 | 0.22% | $0.9 | $2.56 | -11.27% |
| Qualcomm Inc | 27.21 | 9.31 | 6.32 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 30.38 | 10.45 | 10.63 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 31.80 | 1.24 | 2.36 | -0.36% | $2.09 | $5.22 | 8.61% |
| ARM Holdings PLC | 415.59 | 23.85 | 38.94 | 4.35% | $0.06 | $0.89 | 46.6% |
| Analog Devices Inc | 54.84 | 3.30 | 11.22 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 27.94 | 7.84 | 6.98 | 2.25% | $0.47 | $0.79 | -40.62% |
| STMicroelectronics NV | 10.76 | 2.21 | 2.40 | 3.04% | $1.06 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 87.73 | 16.95 | 19.67 | 4.45% | $0.1 | $0.25 | 1.51% |
| First Solar Inc | 28.49 | 4.21 | 8.19 | 5.38% | $0.36 | $0.35 | 15.58% |
| GLOBALFOUNDRIES Inc | 30.45 | 2.40 | 3.84 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 21.77 | 2.59 | 1.30 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 12.60 | 1.83 | 3.06 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 17.45 | 2.34 | 3.29 | 2.91% | $0.31 | $0.42 | -9.29% |
| Lattice Semiconductor Corp | 47.63 | 14.97 | 14.94 | 2.15% | $0.03 | $0.1 | -23.6% |
| Universal Display Corp | 38.20 | 5.61 | 13.69 | 3.86% | $0.07 | $0.13 | 26.67% |
| MACOM Technology Solutions Holdings Inc | 113.69 | 6.98 | 11.46 | 1.45% | $0.04 | $0.1 | 6.98% |
| Cirrus Logic Inc | 23.41 | 3.40 | 3.59 | 2.48% | $0.05 | $0.19 | -39.93% |
| Average | 66.88 | 9.28 | 11.16 | 4.61% | $24.29 | $19.12 | 10.14% |
Through a thorough examination of ON Semiconductor, we can discern the following trends:
A Price to Earnings ratio of 14.92 significantly below the industry average by 0.22x suggests undervaluation. This can make the stock appealing for those seeking growth.
Considering a Price to Book ratio of 3.87, which is well below the industry average by 0.42x, the stock may be undervalued based on its book value compared to its peers.
The Price to Sales ratio is 3.98, which is 0.36x the industry average. This suggests a possible undervaluation based on sales performance.
With a Return on Equity (ROE) of 5.7% that is 1.09% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $710 Million, which is 0.03x below the industry average, potentially indicating lower profitability or financial challenges.
With lower gross profit of $850 Million, which indicates 0.04x below the industry average, the company may experience lower revenue after accounting for production costs.
With a revenue growth of -4.95%, which is much lower than the industry average of 10.14%, the company is experiencing a notable slowdown in sales expansion.
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 evaluating ON Semiconductor alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
Compared to its top 4 peers, ON Semiconductor has a stronger financial position indicated by its lower debt-to-equity ratio of 0.41.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
For ON Semiconductor, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. The high ROE suggests efficient use of shareholder funds, while low EBITDA, gross profit, and revenue growth may indicate operational challenges. Comparing these metrics with industry peers can provide insights into ON Semiconductor's relative performance within the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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