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Scottsdale, Arizona-based ON Semiconductor Corporation (ON) operates as an equipment manufacturer of a broad range of discrete & embedded semiconductor components. With a market cap of $24.3 billion, ON operates through Power Solutions Group, Analog and Mixed-Signal Group, and Intelligent Sensing Group segments.
The semiconductor components manufacturer has significantly underperformed the broader market over the past year. ON stock has dropped 10.6% on a YTD basis and 23.8% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) 7.8% gains in 2025 and 16.6% returns over the past year.
Narrowing the focus, ON has also underperformed the Technology Select Sector SPDR Fund’s (XLK) 13% gains in 2025 and 25.2% surge over the past 52 weeks.
ON Semiconductor’s stock prices plummeted 8.4% in a single trading session after the release of its Q1 results on May 5. While the company’s non-GAAP financials were slightly ahead of market expectations, its overall performance remained concerning. The company’s overall topline for the quarter dropped 22.4% year-over-year to $1.4 billion. Furthermore, it observed a steep increase in the cost of revenues, leading to a 25.5% contraction in gross margin to 20.3%.
Moreover, the company has continued to incur high restructuring and asset impairment charges for years and has failed to deliver on its cost optimization plans. In Q1, ON incurred $539.3 million in such expenses, significantly up from $133.9 million reported in the whole fiscal 2024.
On a GAAP basis, it reported a net loss of $486.1 million, down from $379.9 million profit in the year-ago quarter. Further, its non-GAAP EPS also dropped 49.1% year-over-year to $0.55.
For the full fiscal 2025, ending in December, analysts expect a 42.5% drop in non-GAAP EPS to $2.29. The company has a mixed earnings surprise history. It has surpassed the Street’s bottom-line estimates thrice over the past four quarters, while missing the projections on one other occasion.
The stock has a consensus “Moderate Buy” rating overall. Of the 32 analysts covering the stock, opinions include 13 “Strong Buys,” two “Moderate Buys,” 16 “Holds,” and one “Strong Sell.”
On Jul. 18, Stifel analyst Tore Svanberg maintained a “Hold” rating on the stock, while setting a price target of $50.
ON’s mean price target of $57.52 suggests a modest 2.1% upside from current price levels, while the Street-high target of $75 represents a notable 33.1% premium.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
