ON Semiconductor Corp (ON, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $81.52, ON Semiconductor Corp has witnessed a daily loss of 0.1%, marked against a three-month change of 3.55%. A thorough analysis, underlined by the GF Score, suggests that ON Semiconductor Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 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, indicating a high potential for outperformance, with particularly strong scores in growth and profitability.
Understanding ON Semiconductor Corp Business
ON Semiconductor Corp, with a market cap of $34.84 billion and sales of $8.25 billion, is a leading supplier of power semiconductors and sensors, primarily serving the automotive and industrial markets. As the second-largest power chipmaker globally and the top supplier of image sensors to the automotive market, ON Semiconductor Corp has strategically shifted towards a hybrid manufacturing strategy to ensure flexible capacity. The company is increasingly 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 rating is a testament to its solid balance sheet and adept management of its capital structure. The company's Interest Coverage ratio of 34.94 is particularly impressive, indicating a strong ability to meet interest obligations. Furthermore, an Altman Z-Score of 6.17 suggests a low probability of financial distress. The company's strategic debt management is reflected in its Debt-to-Revenue ratio of 0.41, further solidifying its financial health.
Profitability Rank Breakdown
The Profitability Rank of ON Semiconductor Corp highlights its exceptional ability to generate profits. The company'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 also consistently improved, reaching 47.06% in 2023. These metrics underscore ON Semiconductor Corp's efficiency in converting revenue into profit, while a Predictability Rank of 4.0 stars out of five indicates reliable operational performance.
Growth Rank Breakdown
ON Semiconductor Corp's high Growth Rank reflects its dedication to business expansion. The company's 3-Year Revenue Growth Rate of 13.8% surpasses 58.31% of its peers in the Semiconductors industry. 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 ability to sustain growth momentum.
Conclusion: ON Semiconductor Corp's Position for Outperformance
Considering ON Semiconductor Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic focus on high-growth sectors, combined with its strong financial foundation and profitability, positions it as an attractive investment for those seeking growth and stability. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
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.
