ON
ON Semiconductor Corporation$66.48
Unclear
Target $66.12
Report: Mar 07, 2026Technology • Semiconductors • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$66.48-0.5%
Rec: UnclearConviction: Medium
Entry Target
$50.86
(23% below current)
Fair Value
$66.12
(1% below current)
Stop Loss
$31.00
(53% below current)
Position Size
Starter
Time Horizon
Transitional (12-24 Months)
Key Metrics
Live Snapshot
Market Data
52 Week High$73.76
52 Week Low$31.04
Avg. 3 Month Volume8.66M
Efficiency
LTM Gross Margin33.1%
LTM EBITDA Margin14.8%
LTM EBIT Margin3.3%
LTM Operating Margin1.4%
LTM ROA0.9%
LTM ROE1.5%
LTM ROIC1.9%
LTM ROCE1.7%
Capital Structure
Market Cap (MM)$24.4B
Enterprise Value (MM)$25.3B
Shares Outstanding401.10M
Total Debt (MM)$3.00B
Cash & Equivalents (MM)$2.15B
LTM Net Debt (MM)$857.20M
LTM Net Debt/EBITDA1.0x
Growth
TTM Rev. Growth-15.3%
Last 3-Yr Rev. CAGR-10.4%
Last 3-Yr EBITDA CAGR-33.5%
Last 3-Yr EPS CAGR-57.8%
Valuation
Street Target Price$62.40
LTM EV/Revenue4.2x
LTM EV/Gross Profit12.7x
LTM EV/EBIT126.5x
LTM EV/EBITDA28.5x
LTM P/E201.6x
LTM EV/FCF17.4x
LTM P/FCF16.8x
LTM P/TB2.3x
LTM P/B3.2x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $66.48 versus fair value $66.12 (-0.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Realization of FabRite cost savings and depreciation reduction. Bear case centers on Lower-for-longer cyclical downturn in industrial and automotive markets. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Management's FabRite initiative has structurally lowered the cost base, with $45-50 million in annual depreciation savings expected to hit the P&L in 2026. Furthermore, the AI data center segment is growing at high-teens rates, and the SiC design funnel exceeds $1 billion, providing a clear path to margin expansion as fab utilization returns to the mid-70% range.
Bear Case
The primary risk is a lower-for-longer industrial recession that offsets gains in automotive electrification. Additionally, the commoditization of the SiC market by Chinese competitors could lead to a price war, further impairing ON's margins, which are already significantly below the peer median of 17.5%.
Key Catalysts
Near-Term (0-6 months)Impact: High
Realization of FabRite cost savings and depreciation reduction. This addresses the primary market concern regarding margin compression by pr...
Mid-Term (6-18 months)Impact: Critical
Inflection in fab utilization to mid-70% levels. Rising utilization will dissipate the 700-900 basis point under-absorption charges that cur...
Long-Term (18+ months)Impact: Moderate
ON Semiconductor is at a critical juncture as it completes its manufacturing rationalization and enters a year where structural cost savings...
Primary Risks
Concern: Medium
Lower-for-longer cyclical downturn in industrial and automotive markets. A prolonged demand slump would prevent utilization from reaching th...
Concern: High
Commoditization and price wars in the Silicon Carbide market. Increased capacity from Chinese competitors could turn SiC into a commodity, e...
Concern: Medium
The stewardship verdict is strong, though the upcoming leadership transition introduces a minor variable. The Governance Outcome Tree is as...
Recent Activity
2025-08-12SEC Filing (SC 13G)
+6.18%State Street Corporation reports 4.6% ownership stake in ON Semiconductor
2025-04-03SEC Filing (DEFA14A)
-12.76%ON Semiconductor Corporation 2025 Annual Meeting proxy statement filed
2025-03-06SEC Filing (8-K)
-5.61%ON Semiconductor proposes $35.10 per share acquisition of Allegro MicroSystems
2024-08-01Press Release
-8.12%Keiretsu Forum Mid-Atlantic, South-East And Texas Announces Latest Liquidity Event With Swir Vision Systems
2024-07-30SEC Filing (8-K)
-5.49%ON Semiconductor announces Q2 2024 financial results
Valuation Table
9.3/10Decision Grade
Scenario Range
$56
Bear
$122
Bull
$66