In the latest trading session, ON Semiconductor Corp. (ON) closed at $64.51, marking a +0.94% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.55%. At the same time, the Dow lost 0.06%, and the tech-heavy Nasdaq gained 1.24%.The investment community will be paying close attention to the earnings performance of ON Semiconductor Corp. in its upcoming release. The company is predicted to post an EPS of $0.99, indicating a 20.8% decline compared to the equivalen ...

Company Overview - ON Semiconductor is a semiconductor company specializing in intelligent power solutions and intelligent sensing technologies, primarily serving the industrial and automotive sectors [2] - The company's power solutions, particularly silicon carbide chips for electric vehicles (EVs), help automakers reduce vehicle weight and extend range [3] - Its intelligent sensing technologies are crucial for advanced driver-assistance systems (ADAS) and the digitization of factories and buildings [3][4] Market Prospects - The automotive sector is poised for growth with the rise of EVs and ADAS, while the industrial sector benefits from smart factories and buildings driven by industrial automation and AI analytics [5] - Both key end markets (automotive and industrial) have strong long-term growth potential [5] Recent Challenges - The company faced a 24 5% decline in stock price last year due to weakness in its key end markets over the past 18 months [1] - In the industrial sector, the Institute for Supply Management Purchasing Managers Index (PMI) has been below 50 (indicating contraction) every month since November 2022, except for March 2024 [6] - High interest rates have made car loans more expensive, reducing vehicle sales and production, while a flood of EV models has further pressured demand [7] - In 2023, the company revised its silicon carbide chip revenue estimate for the automotive sector down to $800 million from $1 billion due to reduced demand from a key customer [8] - In 2024, the company expects silicon carbide revenue growth to be in the low- to mid-single digits compared to 2023 [9] Recovery Outlook - The company anticipates an L-shaped recovery, with muted demand, ongoing inventory digestion, and slow end-market demand persisting [10] - Management has adopted a cautious approach to guidance, avoiding overly optimistic expectations [10] Valuation and Investment Case - The stock currently trades at 15 7 times Wall Street's 2024 EPS estimate of $4, and 14 6 times the 2025 EPS estimate of $4 29, with modest revenue growth expectations of 4 2% for 2025 [12] - The semiconductor market is cyclical, and the current downturn is creating fear among investors, but a recovery is expected, potentially making 2024 a trough in earnings [13] - If the company maintains its current valuation, the stock has significant upside potential and could be a long-term hold [14]

Acquisitions and Portfolio Expansion - The company has acquired Silicon Carbide Junction Field-Effect Transistor (SiC JFET) technology, including the United Silicon Carbide subsidiary from Qorvo, for $115 million [1] - This acquisition enhances the company's EliteSiC power portfolio, supporting energy-efficient power supply solutions for AI data centers and advancements in EV battery disconnects and solid-state circuit breakers [15] - Frequent buyouts expand the company's capabilities but introduce integration risks that could complicate future growth [18] Partnerships and Client Base - The company has a strong partner base, including Volkswagen, which drives growth [2] - A multi-year deal with Volkswagen Group was announced to supply a complete power box solution featuring silicon carbide-based technologies for next-generation traction inverters, enhancing EV efficiency and performance [12] - The company has a long-term partnership with DENSO Corporation to advance the procurement of autonomous driving and advanced driver assistance systems technologies [19] - For over a decade, the company has supplied DENSO with intelligent automotive sensors to enhance vehicle intelligence and connectivity, aiming to reduce traffic accident fatalities [6] Financial Performance and Estimates - The company's shares have lost 20.2% over the trailing 12 months against the Zacks Computer & Technology sector's return of 34.8% [9] - For the fourth quarter of 2024, the company expects revenues between $1.71 billion and $1.81 billion, indicating a year-over-year decline of 12.73% [10] - Non-GAAP earnings for the fourth quarter are expected to be between 92 cents per share and 1.04 cents, with a Zacks Consensus Estimate of 99 cents per share, indicating a year-over-year decline of 20.8% [14] - For 2024, the Zacks Consensus Estimate for revenues is pegged at $7.12 billion, indicating a year-over-year decline of 13.70%, and the consensus mark for earnings is pegged at $4 per share, indicating a 22.48% decline year over year [17] Market Challenges and Opportunities - The company is suffering from macroeconomic uncertainty, which has impacted investor confidence and is likely to weigh on performance [4] - Soft demand across automotive and industrial markets, inventory digestion, and weaker-than-expected growth in key sectors are expected to hurt the company's top line [7] - The underperformance can be attributed to muted demand due to ongoing inventory digestion and sluggish end markets, particularly in North America and Europe [13] - Prospects are expected to ride on strong growth in silicon carbide, particularly in utility-scale solar and China BEVs, along with increased demand for intelligent sensing solutions and power delivery for AI data centers [16] Valuation and Investment Considerations - The company's stock is not considered cheap, with a Value Score of C suggesting a stretched valuation at this moment [11] - The company carries a Zacks Rank 3 (Hold), implying investors should wait for a more favorable entry point to accumulate the stock [3]

Billionaire Stanley Druckenmiller, a George Soros protégé, is known for his “top-down” investing style. Druckenmiller’s strategy focuses on making large bets on macroeconomic trends, prioritizing top-performing industries over individual companies.The Bowdoin College and University of Michigan alumnus recently upped his stake in Broadcom Inc AVGO, a $1 trillion semiconductor company based in San Jose, California.Druckenmiller closed his hedge fund, Duquesne Capital in 2010, but still maintains the Duquesne ...

On Semiconductor (ON) recently announced its agreement to acquire the Silicon Carbide Junction Field-Effect Transistor (SiC JFET) technology business, including the United Silicon Carbide subsidiary, from Qorvo (QRVO) for $115 million in cash. The acquisition from Qorvo enhances ON’s EliteSiC power portfolio, enabling the company to meet the growing demand for high energy efficiency and power density in AC-DC power supply units for AI data centers. The move also positions ON to accelerate its readiness for ...

ON Semiconductor Corporation (NASDAQ:ON) Nasdaq Investor Conference December 10, 2024 11:00 AM ET Company Participants Hassane El-Khoury - CEO Thad Trent - CFO Conference Call Participants Joe Moore - Morgan Stanley Joe Moore Great. Thank you, everybody. I'm Joe Moore back again. Very happy to have with us the management team of ON Semi, Hassane El-Khoury, CEO; and Thad Trent, CFO. Question-and-Answer Session Q - Joe Moore So maybe if go off-script breaking news today that you've acquired the Universal Sili ...

THIEF RIVER FALLS, Minn., Dec. 03, 2024 (GLOBE NEWSWIRE) -- DigiKey, a leading global commerce distributor offering the largest selection of technical components and automation products in stock for immediate shipment, announced the release of Season 3 of the Supply Chain Transformed video series, sponsored by Omron Automation and onsemi. The new season will focus on innovative technologies, including IoT, that are fueling the future of the logistics industry. The world of logistics is undergoing a widespre ...

I presented my "Strong Buy" thesis for ON Semiconductor Corporation (NASDAQ: ON ) in July 2024, emphasizing the challenges of destocking activities in the automotive and industrial markets. ON Semiconductor delivered 2% sequential revenue growth for More than 15 years of professional investment experience in global equities across all sectors. My investment style is fundamental, bottom-up, long-term, and quality growth-oriented. I am seeking companies specializing in niche markets, with strong growth potent ...

ON Semiconductor Corporation (NASDAQ:ON) onsemi Investor Webinar: Treo Platform Launch November 18, 2024 9:00 PM ET Company Participants Parag Agarwal - Vice President-Investor Relations & Corporate Development Thad Trent - Chief Financial Officer Sudhir Gopalswamy - President-AMG & ISG Conference Call Participants Ross Seymore - Deutsche Bank Gary Mobley - Loop Vivek Arya - Bank of America Securities Joshua Buchalter - TD Cowen Quinn Bolton - Needham & Company Christopher Rolland - Susquehanna Jeremy Kwan ...

ON Semiconductor Corporation (NASDAQ:ON) onsemi Investor Webinar: Treo Platform Launch November 18, 2024 9:00 PM ET Company Participants Parag Agarwal - Vice President-Investor Relations & Corporate Development Thad Trent - Chief Financial Officer Sudhir Gopalswamy - President-AMG & ISG Conference Call Participants Ross Seymore - Deutsche Bank Gary Mobley - Loop Vivek Arya - Bank of America Securities Joshua Buchalter - TD Cowen Quinn Bolton - Needham & Company Christopher Rolland - Susquehanna Jeremy Kwan ...