In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating ON Semiconductor in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.

ON Semiconductor Background

Onsemi is a supplier of power semiconductors and sensors focused on the automotive and industrial markets. Onsemi is the second-largest power chipmaker in the world and the largest supplier of image sensors to the automotive market. While the firm used to be highly vertically integrated, it now pursues a hybrid manufacturing strategy for flexible capacity. Onsemi is pivoting to focus on emerging applications like electric vehicles, autonomous vehicles, industrial automation, and renewable energy.

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By carefully studying ON Semiconductor, we can deduce the following trends:

With a Price to Earnings ratio of 17.82, which is 0.27x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

The current Price to Book ratio of 4.02, which is 0.4x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

With a relatively low Price to Sales ratio of 4.42, which is 0.36x the industry average, the stock might be considered undervalued based on sales performance.

The company has a lower Return on Equity (ROE) of 4.11%, which is 0.54% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $580 Million, which is 0.13x below the industry average. This potentially indicates lower profitability or financial challenges.

With lower gross profit of $780 Million, which indicates 0.17x below the industry average, the company may experience lower revenue after accounting for production costs.

The company is witnessing a substantial decline in revenue growth, with a rate of -17.15% compared to the industry average of 14.59%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

In terms of the Debt-to-Equity ratio, ON Semiconductor stands in comparison with its top 4 peers, leading to the following comparisons:

When comparing the debt-to-equity ratio, ON Semiconductor is in a stronger financial position compared to its top 4 peers.

The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.4.

Key Takeaways

For ON Semiconductor, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. However, the low ROE suggests lower profitability compared to peers. The low EBITDA and gross profit also point to weaker financial performance. Additionally, the low revenue growth indicates slower expansion compared to industry counterparts.

This article was generated by Benzinga's automated content engine and reviewed by an editor.