In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating ON Semiconductor ON in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in the industry.
ON Semiconductor Background
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 | 14.46 | 3.88 | 3.83 | 7.37% | $0.79 | $0.94 | -4.06% |
| NVIDIA Corp | 74.53 | 51.72 | 36.40 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 50.75 | 9 | 15.34 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 341.07 | 5.23 | 12.95 | 1.2% | $1.22 | $2.91 | 10.16% |
| Qualcomm Inc | 24.81 | 8.42 | 5.39 | 12.4% | $3.58 | $5.62 | 4.99% |
| Intel Corp | 100.83 | 1.61 | 3.13 | 2.57% | $5.57 | $7.05 | 9.71% |
| Texas Instruments Inc | 24.09 | 9.17 | 8.91 | 8.14% | $1.98 | $2.43 | -12.7% |
| ARM Holdings PLC | 1515.74 | 25.75 | 43.85 | 1.78% | $0.18 | $0.79 | 13.81% |
| Analog Devices Inc | 34.89 | 2.73 | 8.49 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 20.59 | 6.73 | 5.68 | 5.97% | $0.75 | $1.12 | -18.6% |
| STMicroelectronics NV | 9.54 | 2.29 | 2.32 | 6.69% | $1.5 | $1.95 | -3.21% |
| Monolithic Power Systems Inc | 74.18 | 15.43 | 17.40 | 4.85% | $0.12 | $0.25 | -1.3% |
| GLOBALFOUNDRIES Inc | 27.99 | 2.55 | 3.85 | 2.53% | $0.73 | $0.53 | 0.11% |
| ASE Technology Holding Co Ltd | 22.08 | 2.60 | 1.33 | 3.17% | $28.28 | $25.76 | 4.16% |
| United Microelectronics Corp | 10.81 | 1.82 | 2.96 | 4.72% | $29.0 | $20.46 | -24.3% |
| First Solar Inc | 21.54 | 2.67 | 5.40 | 5.38% | $0.47 | $0.5 | 15.58% |
| Skyworks Solutions Inc | 18.96 | 2.76 | 3.70 | 3.76% | $0.37 | $0.51 | -9.61% |
| Lattice Semiconductor Corp | 40.61 | 14.93 | 14.25 | 14.98% | $0.05 | $0.12 | -3.05% |
| Universal Display Corp | 38.72 | 5.37 | 13.56 | 4.36% | $0.08 | $0.12 | -6.34% |
| MACOM Technology Solutions Holdings Inc | 97.56 | 7.14 | 11.64 | 1.27% | $0.03 | $0.09 | -12.75% |
| Rambus Inc | 20.04 | 6.31 | 14.50 | 5.87% | $0.07 | $0.1 | -0.12% |
| Average | 128.47 | 9.21 | 11.55 | 6.3% | $4.71 | $4.8 | 12.17% |
Through a detailed examination of ON Semiconductor, we can deduce the following trends:
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A Price to Earnings ratio of 14.46 significantly below the industry average by 0.11x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The current Price to Book ratio of 3.88, which is 0.42x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 3.83, which is 0.33x the industry average.
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The company has a higher Return on Equity (ROE) of 7.37%, which is 1.07% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $790 Million, which is 0.17x below the industry average. This potentially indicates lower profitability or financial challenges.
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With lower gross profit of $940 Million, which indicates 0.2x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of -4.06% is significantly below the industry average of 12.17%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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.
By considering the Debt-to-Equity ratio, ON Semiconductor can be compared to its top 4 peers, leading to the following observations:
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ON Semiconductor has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.43.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For ON Semiconductor, the PE, PB, and PS ratios are all low compared to its industry peers, indicating potential undervaluation. On the other hand, the high ROE suggests strong profitability, while low EBITDA, gross profit, and revenue growth may raise concerns about operational performance and future growth prospects within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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