Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating ON Semiconductor ON in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 13.99 | 3.63 | 3.73 | 5.7% | $0.71 | $0.85 | -4.95% |
| NVIDIA Corp | 72.29 | 61.84 | 38.62 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.77 | 8.09 | 13.09 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 69.15 | 10.68 | 16.93 | 3.02% | $5.58 | $7.78 | 42.99% |
| Advanced Micro Devices Inc | 235.09 | 4.67 | 11.61 | 0.22% | $0.9 | $2.56 | 2.24% |
| Qualcomm Inc | 26.56 | 9.08 | 6.17 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 30.28 | 10.42 | 10.60 | 6.52% | $1.77 | $2.1 | -16.4% |
| ARM Holdings PLC | 564.21 | 32.38 | 52.86 | 4.35% | $0.06 | $0.89 | 46.6% |
| Intel Corp | 31.93 | 1.24 | 2.37 | -0.36% | $2.09 | $5.22 | 8.61% |
| Analog Devices Inc | 53.34 | 3.21 | 10.91 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 26.28 | 7.38 | 6.57 | 2.25% | $0.47 | $0.79 | -40.62% |
| Monolithic Power Systems Inc | 97.94 | 18.92 | 21.95 | 4.45% | $0.1 | $0.25 | 1.51% |
| STMicroelectronics NV | 10.07 | 2.08 | 2.25 | 3.04% | $1.06 | $1.44 | -18.41% |
| GLOBALFOUNDRIES Inc | 31.40 | 2.48 | 3.96 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 23.22 | 2.76 | 1.39 | 1.94% | $23.55 | $20.87 | 1.46% |
| First Solar Inc | 23.63 | 3.50 | 6.79 | 3.48% | $0.36 | $0.35 | 44.83% |
| United Microelectronics Corp | 13.07 | 1.89 | 3.17 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 20.07 | 2.69 | 3.78 | 2.91% | $0.31 | $0.42 | -9.29% |
| Universal Display Corp | 45.71 | 6.72 | 16.39 | 3.86% | $0.07 | $0.13 | 26.67% |
| MACOM Technology Solutions Holdings Inc | 125.39 | 7.70 | 12.64 | 1.45% | $0.04 | $0.1 | 6.98% |
| Lattice Semiconductor Corp | 37.17 | 11.68 | 11.66 | 2.15% | $0.03 | $0.1 | -23.6% |
| Cirrus Logic Inc | 26.06 | 3.76 | 4 | 2.48% | $0.07 | $0.19 | -0.27% |
| Average | 76.03 | 10.15 | 12.27 | 4.53% | $24.33 | $19.14 | 14.49% |
By carefully studying ON Semiconductor, we can deduce the following trends:
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The stock's Price to Earnings ratio of 13.99 is lower than the industry average by 0.18x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 3.63, significantly falling below the industry average by 0.36x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio is 3.73, which is 0.3x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 5.7% is 1.17% above the industry average, highlighting efficient use of equity to generate profits.
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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.
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Compared to its industry, the company has lower gross profit of $850 Million, which indicates 0.04x below the industry average, potentially indicating 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 14.49%, 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.
In terms of the Debt-to-Equity ratio, ON Semiconductor can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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When considering the debt-to-equity ratio, ON Semiconductor exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.41, which can be perceived as a positive aspect by investors.
Key Takeaways
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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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