2024-04-26 13:13:46 ET
Summary
- OnSemi supplies chips to end markets currently in a cyclical downturn, causing revenue to decline.
- Despite short-term challenges, OnSemi has long-term potential in EVs, self-driving cars, and renewable energy applications.
- The article discusses OnSemi's realignment, margin expansion plans, risks, valuation, and reasons to consider investing.
ON Semiconductor Corporation ( ON ), rebranded several years ago as OnSemi, may be an interesting stock for those investors looking for value in the semiconductor manufacturing space. The company primarily supplies chips to the auto and industrial industries, markets that are currently in a cyclical downturn that began in the latter half of 2023. Worse for current investors, things don't look like they will get better any time soon, with the company's management being reluctant to call a market bottom on a recent earnings call. The chart below shows the stock is down over 20% for the year.
Despite excellent prospects for the business in the long term, near-term investor sentiment towards OnSemi is poor. However, suppose you are an investor looking to profit from secular trends like the adoption of electric vehicles ("EVs") and advanced driver-assistance systems ("ADAS") in new cars and renewable energy applications. In that case, the stock has good potential upside at current prices. The company focuses on products that should outgrow the broader semiconductor industry over the next five years....
Read the full article on Seeking Alpha
For further details see:
ON Semiconductor: A Smart Way To Capitalize On The Semiconductor Industry