In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating ON Semiconductor ON against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important 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.
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 | 14.29 | 3.71 | 3.81 | 5.7% | $0.71 | $0.85 | -4.95% |
| NVIDIA Corp | 71.93 | 49.92 | 35.13 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 46.03 | 8.17 | 13.91 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 211.83 | 4.20 | 10.46 | 0.22% | $0.9 | $2.56 | -11.27% |
| Qualcomm Inc | 24.01 | 8.21 | 5.58 | 12.4% | $3.08 | $5.28 | 4.99% |
| Texas Instruments Inc | 27.38 | 9.42 | 9.59 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 31.45 | 1.23 | 2.34 | -0.36% | $1.83 | $5.22 | -17.41% |
| ARM Holdings PLC | 1185.31 | 20.13 | 34.29 | 1.78% | $0.18 | $0.79 | 13.81% |
| Analog Devices Inc | 35.10 | 2.74 | 8.54 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 20.90 | 6.83 | 5.76 | 5.97% | $0.75 | $1.12 | -18.6% |
| STMicroelectronics NV | 10.05 | 2.07 | 2.24 | 3.04% | $0.55 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 84.92 | 16.41 | 19.04 | 4.85% | $0.1 | $0.25 | -1.3% |
| GLOBALFOUNDRIES Inc | 26.38 | 2.41 | 3.63 | 2.53% | $0.72 | $0.53 | -11.76% |
| ASE Technology Holding Co Ltd | 20.68 | 2.46 | 1.24 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 10.62 | 1.87 | 2.85 | 3.43% | $23.32 | $17.81 | -18.98% |
| First Solar Inc | 18.92 | 2.80 | 5.44 | 5.38% | $0.36 | $0.35 | 15.58% |
| Skyworks Solutions Inc | 16.90 | 2.26 | 3.18 | 2.91% | $0.31 | $0.42 | -12.94% |
| Lattice Semiconductor Corp | 44.78 | 14.08 | 14.05 | 2.15% | $0.03 | $0.1 | -23.6% |
| Universal Display Corp | 36.90 | 5.13 | 12.93 | 4.36% | $0.08 | $0.12 | -6.34% |
| MACOM Technology Solutions Holdings Inc | 95.28 | 6.97 | 11.36 | 1.27% | $0.03 | $0.09 | -12.75% |
| Rambus Inc | 16.54 | 5.94 | 12.90 | 3.24% | $0.03 | $0.09 | -3.56% |
| Average | 101.8 | 8.66 | 10.72 | 4.9% | $3.89 | $4.24 | 6.96% |
After a detailed analysis of ON Semiconductor, the following trends become apparent:
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At 14.29, the stock's Price to Earnings ratio is 0.14x less than the industry average, suggesting favorable growth potential.
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The current Price to Book ratio of 3.71, which is 0.43x 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 3.81, which is 0.36x the industry average.
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The company has a higher Return on Equity (ROE) of 5.7%, which is 0.8% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $710 Million, which is 0.18x below the industry average, potentially indicating lower profitability or financial challenges.
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The gross profit of $850 Million is 0.2x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is witnessing a substantial decline in revenue growth, with a rate of -4.95% compared to the industry average of 6.96%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 comparing ON Semiconductor with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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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.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
For ON Semiconductor, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. Conversely, the high ROE suggests efficient use of shareholder funds, while low EBITDA, gross profit, and revenue growth may point to operational challenges that need addressing for better performance within the industry sector.
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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