Start here if you're new
what it is
ON makes the power chips that help your car, factory gear, and electronics waste less electricity.
how it gets paid
Last year On Semiconductor made $6.0B in revenue. automotive power chips was the main engine at $3.00B, or 50% of sales.
why growth slowed
Revenue fell 15.3% last year. The key number was 15.3% annual revenue decline.
what just happened
ON's last quarter was basically in line, with EPS at $0.64 on soft demand.
At a glance
B+ balance sheet — decent shape, but not bulletproof
45/100 earnings predictability — expect surprises
25.2x trailing p/e — priced about right
14.0% return on capital — nothing to write home about
xvary composite: 64/100 — average
What they do
ON makes the power chips that help your car, factory gear, and electronics waste less electricity.
If your EV, factory drive, or fast charger needs to lose less power as heat, ON sells the chips that make that happen. That matters because the company still produced a 24.0% net profit margin on nearly $6.0 billion of annual revenue, even after sales fell 15.3%. Power management (controlling how electricity moves) → using less energy and heat → your system runs cooler, longer, and cheaper.
How they make money
$6.0B
annual revenue · their business grew -15.3% last year
automotive power chips
$3.00B
18.0%
industrial and factory power
$1.32B
12.0%
computing and data management
$0.84B
10.0%
consumer and mobile devices
$0.48B
20.0%
standard semiconductor components
$0.36B
15.0%
The products that matter
power control chips
Power Solutions
$3.6B · 60% of segment revenue
this is the center of gravity. at $3.6B, it is six times larger than Intelligent Sensing. when this segment slows, the whole stock feels it.
core segment
mixed-signal and analog
Advanced Solutions
$1.8B · 30% of segment revenue
this $1.8B business is the second leg of the story. ON needs it healthy because one segment alone does not fix a margin problem.
second engine
image and sensing chips
Intelligent Sensing
$0.6B · 10% of segment revenue
at $0.6B, this is the smallest bucket. it adds optionality, but it is too small to carry the stock if the larger businesses stay soft.
smallest bucket
Key numbers
14.0%
return on capital
Return on capital (profit earned on the cash tied up in the business) → 14 cents on every dollar invested → ON is still earning real money through a down cycle.
$3.0B
long-term debt
Long-term debt (money the company owes beyond one year) → fixed obligations in a cyclical industry → manageable at 11% of capital, but you still watch it.
25.2x
trailing p/e
Trailing P/E (stock price divided by past 12-month earnings) → investors are paying 25.2 times old profits → the stock already expects a recovery.
24.0%
net margin
Net margin (profit after expenses on each sales dollar) → 24 cents kept from every dollar of revenue → rare for a company with falling sales.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 20 / 100
- long-term debt $3.0B (11% of capital)
- net profit margin 24.0% — keeps 24 cents of every dollar in revenue
- return on equity 17% — $0.17 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ON 3 years ago → it's now worth $7,280.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
ON's last quarter was basically in line, with EPS at $0.64 on soft demand.
Revenue for the latest reported quarter was about $1.53 billion, down 11.2% vs. prior year based on consensus-linked reporting. Full-year revenue was nearly $6.0 billion, down 15.3%, so the bigger issue is still the missing top-line rebound.
$1.53B
revenue
$0.64
eps
32.1%
gross margin
the number that mattered
The key number was 15.3% annual revenue decline, because a flat EPS quarter does not fix three straight years of shrinking sales.
-
on semiconductor (onsemi) is looking to rebound after a disappointing 2025.
-
the company posted full-year revenues of nearly $6 billion last year, which represented a decline of 15% from 2024.
-
this marks the third straight year of top-line decreases.
-
weakness in a number of end markets has been damaging.the automotive industry has been especially harmful, as consumers have been shying away from electric vehicle purchases.
-
industrial markets have been slow also.
source: company earnings report, 2026
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What could go wrong
the top risk is factory under-utilization pushing power-chip margins lower. ON is still profitable, but the latest guide says the slowdown is already showing up in the gross margin line, which is where semiconductor pain usually starts.
med
gross margin compression
Q1 2026 gross margin guidance is 37.5%–39.5% versus a 39.4% ten-year average. That gap looks small until you remember fabs carry fixed costs. When utilization drops, each point matters more than it looks.
management's own framework implies a 200-basis-point drop could cut annual operating profit by about $120M.
med
soft revenue is not leaving yet
Q4 2025 revenue came in at $1.53B, down 11.2% from a year ago, and Q1 guidance only points to $1.44B–$1.54B. That is stabilization at best. It is not a clean acceleration.
if quarterly revenue stays around the current $1.5B run-rate, the stock needs buybacks and margin recovery to do most of the work.
med
leadership turnover in the core segment
Simon Keeton, Group President of Power Solutions, is resigning effective June 2026. That matters because Power Solutions is the largest segment shown here at $3.6B.
execution slips in the largest segment show up fast in customer programs, product timing, and the recovery narrative.
med
volatility is part of the package
price stability is 20/100 and the 52-week range runs from $31 to $74. This is not a sleepy compounder. It rerates hard when investors change their view of the cycle.
that range tells you the market is still debating what ON earns in a normal demand year versus a soft one.
a margin guide stuck at 37.5%–39.5% and revenue near $1.5B per quarter leaves little room for the market to keep treating ON like a clean recovery story.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q1 2026 earnings report
the guide is already out there: $1.44B–$1.54B revenue and 37.5%–39.5% gross margin. the catch is simple: if ON misses low expectations, the recovery story slips again.
margin
gross margin versus the 39.4% long-term average
a company guiding below its own decade average is telling you the cycle still has its hands on the wheel. you want to see this line move back above 39% and stay there.
management
Power Solutions leadership handoff in June 2026
when the executive change hits the segment carrying $3.6B of revenue, continuity matters more than polished language on a conference call.
flow
whether institutional selling reverses
278 buyers versus 306 sellers in 4q2025 is not panic, but it is not conviction either. if the story improves, this is one of the first places you should see it.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts think ON has above-average 12-month upside from here.
risk profile
average
stability score 3 — middle-of-the-road risk on paper, even if the share price feels less calm than that.
chart momentum
top 20%
technical score 2 — the chart improved faster than the fundamentals. welcome to cyclical semiconductor stocks.
earnings predictability
45 / 100
earnings predictability is weak. translation: you should expect the quarterly story to keep moving around.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 278 buyers vs. 306 sellers in 4q2025. total institutional holdings: 0.4B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$37
$98
$59
current price
$68
target midpoint · +15% from current · 3-5yr high: $115 (+95% · 18% ann'l return)
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