ON Semiconductor ON shares have lost 14.9% year to date (YTD), underperforming the Zacks Computer & Technology sector’s return of 22.3%.

 

ON shares have underperformed the Zacks Semiconductor - Analog and Mixed industry as well as peers Analog Devices ADI, MACOM Technology Solutions MTSI, and Semtech SMTC on a YTD basis.

 

Over the same time frame, ADI, MTSI, and SMTC have returned 15.5%, 18.1%, and 97.9%, respectively. The industry appreciated 7.1% YTD.

 

The underperformance can be attributed to sluggish top-line growth due to ongoing inventory correction in the automotive and industrial markets. Challenging macroeconomic conditions and stiff competition have been key concerns for ON.

 

ON Semiconductor Corporation Price and Consensus

ON Semiconductor Corporation price-consensus-chart | ON Semiconductor Corporation Quote

ON’s Q3 Outlook Not So Rosy

 

For the third quarter of 2024, ON expects revenues in the range of 1.7-$1.8 billion.  Non-GAAP earnings per share are expected between 91 cents and $1.03.

 

The Zacks Consensus Estimate for revenues is pegged at $1.75 billion, indicating a year-over-year decline of 19.77%.

 

The consensus mark for third-quarter 2024 earnings is pegged at 97 cents per share unchanged over the last 30 days, suggesting a 30.22% year-over-year decline.

 

ON’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.32%.

 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

 

Acquisitions and Investments Benefit ON’s Prospects

 

On Semiconductor’s acquisition of GT Advanced Technologies has helped it meet the growing demand for Silicon carbide-based solutions.

 

Acquisitions of Cypress Semiconductor’s CMOS Image Sensor Business Unit, SANYO Semiconductor, have helped it expand its portfolio.

 

On Semiconductor also announced that it is set to invest up to $2 billion in a vertically integrated SiC manufacturing facility in the Czech Republic, further expanding prospects.

 

In second-quarter 2024, ON released the latest generation of the T10 PowerTrench family and EliteSiC 650-volt MOSFET, which enhanced efficiency and reduced power consumption.

 

Here’s Why You Should Stay Away From ON

 

ON stock is trading at a premium, as suggested by the Value Score of C.

 

Its sluggish growth prospect due to weakness in the automotive and industrial end markets is a headwind.

 

ON carries a Zacks Rank #4 (Sell), which implies that investors should stay away from the stock at present.

 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.ON Semiconductor (ON) shares have lost 14.9% year to date (YTD), underperforming the Zacks Computer & Technology sector’s return of 22.3%.

 

ON shares have underperformed the Zacks Semiconductor - Analog and Mixed industry as well as peers Analog Devices (ADI), MACOM Technology Solutions (MTSI), and Semtech (SMTC) on a YTD basis. 

 

Over the same time frame, ADI, MTSI, and SMTC have returned 15.5%, 18.1%, and 97.9%, respectively. The industry appreciated 7.1% YTD.

 

The underperformance can be attributed to sluggish top-line growth due to ongoing inventory correction in the automotive and industrial markets. Challenging macroeconomic conditions and stiff competition have been key concerns for ON.

 

ON’s Q3 Outlook Not So Rosy

 

For the third quarter of 2024, ON expects revenues in the range of 1.7-$1.8 billion.  Non-GAAP earnings per share are expected between 91 cents and $1.03.

 

The Zacks Consensus Estimate for revenues is pegged at $1.75 billion, indicating a year-over-year decline of 19.77%. 

 

The consensus mark for third-quarter 2024 earnings is pegged at 97 cents per share unchanged over the last 30 days, suggesting a 30.22% year-over-year decline.

 

ON’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.32%.

 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

 

Acquisitions and Investments Benefit ON’s Prospects

 

On Semiconductor’s acquisition of GT Advanced Technologies has helped it meet the growing demand for Silicon carbide-based solutions. 

 

Acquisitions of Cypress Semiconductor’s CMOS Image Sensor Business Unit, SANYO Semiconductor, have helped it expand its portfolio. 

 

On Semiconductor also announced that it is set to invest up to $2 billion in a vertically integrated SiC manufacturing facility in the Czech Republic, further expanding prospects.

 

In second-quarter 2024, ON released the latest generation of the T10 PowerTrench family and EliteSiC 650-volt MOSFET, which enhanced efficiency and reduced power consumption. 

 

Here’s Why You Should Stay Away From ON

 

ON stock is trading at a premium, as suggested by the Value Score of C.

 

Its sluggish growth prospect due to weakness in the automotive and industrial end markets is a headwind. 

 

ON carries a Zacks Rank #4 (Sell), which implies that investors should stay away from the stock at present.

 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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