ON Semiconductor Corp (ON, Financial) has recently garnered attention from the investment community, buoyed by its solid financial performance. With a current share price of $81.93, the company has enjoyed a daily increase of 1.4%, and an impressive three-month growth of 25.56%. A deep dive into the company's GF Score reveals a promising outlook for ON Semiconductor Corp, indicating a strong potential for future growth.
What Is the GF Score?
The GF Score is an exclusive stock performance ranking system created by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have demonstrated a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns than those with lower scores, making the GF Score a valuable tool for investors seeking high-performing investments. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 7/10
ON Semiconductor Corp has been assigned a GF Score of 94 out of 100 by GuruFocus, reflecting its high potential for market outperformance, with particularly strong scores in growth and profitability.
Understanding ON Semiconductor Corp's Business
ON Semiconductor Corp, with a market capitalization of $35.01 billion and annual sales of $8.25 billion, is a leading supplier of power semiconductors and sensors, primarily serving the automotive and industrial markets. As the world's second-largest power chipmaker and top supplier of image sensors for the automotive industry, ON Semiconductor Corp has shifted from a highly vertically integrated model to a hybrid manufacturing strategy, allowing for greater capacity flexibility. The company is strategically focusing on high-growth areas such as electric vehicles, autonomous vehicles, industrial automation, and renewable energy, positioning itself at the forefront of technological innovation.
Financial Strength Breakdown
ON Semiconductor Corp's Financial Strength is evident in its balance sheet, which showcases the company's resilience and strategic capital management. An Interest Coverage ratio of 34.94 signifies a robust capacity to meet interest obligations, far exceeding the benchmark set by investment guru Benjamin Graham. The Altman Z-Score of 6.13 further indicates a low risk of financial distress, while a Debt-to-Revenue ratio of 0.41 demonstrates prudent debt management.
Profitability Rank Breakdown
The company's Profitability Rank is a testament to its efficiency in generating profits. ON Semiconductor Corp's Operating Margin has seen a significant increase over the past five years, with the latest figure standing at 31.67%. This upward trend is mirrored in the company's Gross Margin, which has consistently improved, indicating an enhanced ability to convert sales into profits. The company's 4-star Predictability Rank further solidifies investor confidence in its operational consistency.
Growth Rank Breakdown
ON Semiconductor Corp's high Growth Rank reflects its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 13.8% surpasses over half of its industry peers. Additionally, the company's EBITDA has experienced substantial growth, with a three-year growth rate of 46 and a five-year rate of 24.6, highlighting its ongoing growth capabilities.
Conclusion: ON Semiconductor Corp's Position for Outperformance
ON Semiconductor Corp's impressive financial strength, profitability, and growth metrics, as encapsulated by the GF Score, underscore the company's exceptional position for potential market outperformance. Investors seeking to capitalize on such financially robust companies can explore more opportunities using the GF Score Screen. With ON Semiconductor Corp's strategic focus on high-growth sectors and its strong financial indicators, the question remains: how will the company leverage its strengths to continue its trajectory of success in the dynamic semiconductor industry?
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
