On Semiconductor Corp (NASDAQ: ON)

Sector: Technology Industry: Semiconductors CIK: 0001097864
P/B 2.84
P/E 70.46
P/S 3.63
Market Cap 22.48 Bn
ROIC (Qtr) 2.42
Div Yield % 0.00
Rev 1y % (Qtr) -11.98
Total Debt (Qtr) 3.38 Bn
Debt/Equity (Qtr) 0.43

About

Stock Price Chart

Analysis

Pros

  • Strong operating cash flow of 1.78B provides robust 0.53x coverage of total debt 3.38B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.47B provide 4945x coverage of short-term debt 500000, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 1.78B provides strong 12.34x coverage of stock compensation 144.60M, indicating sustainable incentive practices.
  • Operating cash flow of 1.78B provides exceptional 25.91x coverage of interest expenses 68.90M, showing strong debt service capability.
  • Strong tangible asset base of 11.08B provides 3.28x coverage of total debt 3.38B, indicating robust asset backing and low credit risk.

Cons

  • Operating cash flow of 1.78B barely covers its investment activities of (639.50M), with a coverage ratio of -2.79, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (639.50M) provide weak support for R&D spending of 605M, which is -1.06x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 2.47B provide limited coverage of acquisition spending of (117.50M), which is -21.04x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 423.10M show weak coverage of depreciation charges of 637.70M, with a 0.66 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.37B represents just -855x of debt issuance (1.60M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,276.26 Bn 43.11 22.85 10.48 Bn
2 AVGO Broadcom Inc. 1,690.87 Bn 89.31 28.22 64.23 Bn
3 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,514.32 Bn 29.36 12.71 31.18 Bn
4 AMD Advanced Micro Devices Inc 343.27 Bn 103.83 10.72 3.87 Bn
5 MU Micron Technology Inc 269.16 Bn 31.52 7.20 15.28 Bn
6 INTC Intel Corp 249.55 Bn 1,260.33 4.67 46.55 Bn
7 QCOM Qualcomm Inc/De 195.62 Bn 35.30 4.42 14.81 Bn
8 TXN Texas Instruments Inc 163.92 Bn 32.50 9.49 14.05 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.79 3.95
EV to Cash from Ops. 13.07 -331.60
EV to Debt 6.91 86.14
EV to EBIT 55.15 -55.96
EV to EBITDA 25.08 20.88
EV to Free Cash Flow [EV/FCF] 17.06 -4.09
EV to Market Cap 1.04 0.80
EV to Revenue 3.77 18.79
Price to Book Value [P/B] 2.84 5.23
Price to Earnings [P/E] 70.46 12.47

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 2.29
Dividend Payout Ratio % 0.00 8.00
Dividend per Basic Share 0.00 0.62
FCF Dividend Payout Ratio % 0.00 10.38
Interest Coverage 6.14 8.19

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 54.74 -155.77
Cash and Equivalents Growth (1y) % 0.09 44.44
Dividend Growth (1y) % 0.00 5.30
EBIAT Growth (1y) % -78.95 34.22
EBITDA Growth (1y) % -64.32 47.50
EBIT Growth (1y) % -79.52 30.14
EBT Growth (1y) % -82.32 47.04
EPS Growth (1y) % -80.98 36.18
FCF Growth (1y) % 34.57 252.76
Gross Profit Growth (1y) % -34.53 43.92

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.48 0.49
Cash Payout Ratio 0.00 0.09
Cash Ratio 2.04 2.23
Current Ratio 5.23 5.43
Debt to Equity Ratio 0.43 0.34
Interest Cover Ratio 6.14 8.19
Times Interest Earned 6.14 8.19

Profitability

Metric Value Industry Percentile
EBITDA Margin % 17.10 -112.44
EBIT Margin % 6.84 -92.10
EBT Margin % 5.72 -132.39
Gross Margin % 35.70 47.63
Net Profit Margin % 5.20 -133.41