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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
On Semiconductor Corporation (XNAS:ON) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ON
Name:
ON SEMICONDUCTOR CORPORATION (XNAS:ON)
Sector:
304.80M
Industry:
Semiconductors
CEO:
Mr. Keith Jackson
Total Employees:
30,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -173.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ON SEMICONDUCTOR CORPORATION(ON) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
67.51
One Month Price Target:
$68.19
Six Month Price Target :
$71.6
Likely Price in One Year's Time:
Ticker:
$75.68
Likely Trading Range Today Under (Normal Volatility)
$67.22
Price Upper limit ($) :
$68.13
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$62.18
This week:
$55.6
This month :
$43.69
Other Primary facts
Market Cap:
28.62B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
433.24M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.38%
-26.84%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$92.18
$80.60
$42.84
$54.42
Medium risk (<10%) entry points
Buy Call
Sell Call
$76.83
Buy Put:
Sell Put:
$74.36
$58.16
$60.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ON
Sharpe Ratio:
5.82%
Comparison:
ON, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 87.99% higher than the industry
& ratio is 155.37% higher than the market/S&P 500 average
Average Returns/Yield of
ON
Daily returns:
0.24%
Weekly returns:
1.20%
Monthly returns:
4.78%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is 79.72% above industry average
Classification:
ON, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.88
Statistical test of Returns:
ON has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.96%
Weekly Volatility:
8.85%
Monthly Volatility:
17.70%
Yearly Volatility:
61.31%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.32%
Volatility in last five trading days has been -92.03% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.89%
Weekly VaR:
-17.64%
Monthly VaR:
-35.28%
How Much Can the price of
ON
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$48.31
This translates to price declining to:
$10.13
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ON is a 149.00% riskier investment compared to the market/S&P 500 & is 113.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 11.51% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ON
Beta in relation to market/S&P 500--1.80
Expected beta in 1 year's time:
1.1
Expected beta in 3 year's time:
1.556
Unlevered (debt free) Beta:
1.162
Beta in relation to Nasdaq (XNAS):
1.519
Beta in relation to all global stocks::
1.022
Beta Comparison & Analysis
Beta of competitors/peers::
1.285
Beta is 40.13% higher than peers
Average Industry Beta:
1.41
Beta is 27.71% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
25.02%
Sustainable growth rate is -9.52% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.419
Alpha is 119.10% above industry average alpha yield
Alpha is 2669% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ON
Equity cost of capital:
0.155
Equity cost of capital is 20.89% above industry mean WACC
Unlevered (without debt) cost of capital:
9.99%
Before-tax cost of debt:
1.70%
After-tax cost of debt:
1.35%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.35%
WACC is 6.12% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$16.63
Revenue growth rate per share of (3Y):
5.83
Annual revenue growth rate is -37.82% below industry average
EPS:
$3.26
Expected Annual growth rate of EPS (3Y):
63.43%
Expected future EPS growth rate is 21.67% higher than the Semiconductors industry
Free cash flow (FCF) per share:
$3.67
-
-
Debt per share
$7.01
EBITDA per share
$5.18
Valuation Analysis Today of
ON
P/E Ratio:
17.49
P/E Ratio of Competitors/Peers:
96.97
P/E ratio is -81.97% lower than main peers & is -57.84% lower than the industry
Stock price/value with industry average P/E ratio: $135.21
ON is -50.07% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.06
Price to sales ratio is -50.04% below the industry mean
P/B (Price to book value ratio):
5.83
Price to free cash flow: 18.41
-
Net income growth rate (3Y):
66.05%
Net income growth rate is -215.31% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
60.73%
Net debt to equity ratio:
31.23%
Debt to assets ratio:
29.72%
Net debt to assets ratio:
15.28%
Debt-to-asset ratio is -23.75% below industry average
Ability to repay debt:
Interest coverage ratio:
41.14
Interest coverage ratio is 25.47% more than industry average
Looking forward:
Debt growth rate:
-11.94%
Annual debt growth is -113% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.13%
Analysis of Key Statistics
Correlation of price movement with the market:
0.683
Statistical significance of correlation:
ON has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 8.91% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.023
Covariance of price movement with the market:
0.053
Kurtosis
7.338
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.004
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ON
Gross Profit Margin Ratio:
174%
Operating Profit Margin Ratio:
25.11%
Operating profit margin is 6.74% higher than the industry
Net Profit Margin Ratio:
174%
Effective Tax Rate:
9.35%
Effective tax rate is -38.06% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
29.01%
Return on equity (ROE) is 1.45% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
14.20%
Return on assets (ROA) is 7.86% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
2.79
Current ratio is -31.33% below industry average
Cash Conversion Cycle (days):
17.1
Cash conversion cycle is -69.08% below industry average
The remaining useful life of property plant & equipment is: 26.1 years
Stock based compensation to net income ratio:
1.55%
In-depth Efficiency Analysis
Revenue generated per employee:
240.1K
Each employee generates -61% less revenue than industry average revenue per employee
EBITDA generated per employee:
74.9K
Each employee generates -68% less EBITDA than industry average revenue per employee
Profit generated per employee:
48.3K
Each employee generates -70% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.2K
Each employee generates -63% less free cash flow than industry average revenue per employee
Assets/Capital per employee
194.8K
Each employee generates -63% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 1.88%
Growth rate in R&D investment/expenditure is -86.71% lower than the industry
Competitors/Peer firms of
ON
MXIM
ZEBRA TECHNOLOGIES CORPORATION (XNAS:ZBRA)
MONGODB, INC. (XNAS:MDB)
DOCUSIGN, INC. (XNAS:DOCU)
VERISIGN, INC. (XNAS:VRSN)
TERADYNE, INC. (XNAS:TER)
APPLOVIN CORPORATION (XNAS:APP)
SKYWORKS SOLUTIONS, INC. (XNAS:SWKS)
Garmin Ltd (XNYS:GRMN)
Current Analyst Ratings
Strong buy�21%
Buy�38%
Hold�25%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
7.20B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.05B
3.16B
637.60M
309.80M
595.40M
285.60M
108.80M
1.34B
1.10M
54.60M
583.60M
2.25B
1.81B
1.45B
1.69B
157.80M
1.45B
Statement of Cash Flow
Date:
Period:
140.60M
Differed Income Tax :
38.30M
Stock Based Compensation :
22.50M
Change in Working Capital :
- 247600.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 6200.00K
Net Cash Provided by Operating Activities:
478.60M
Investments in PP&E:
- 173800.00K
Net Acquisitions:
10.50M
Purchases of Investments:
- 7800.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/1/22
2022
Q1
1.65B
-
1.65B
910.70M
1.50B
315.60M
4.37B
2.56B
1.94B
474.50M
-
349.30M
525.10M
5.85B
-
10.21B
725.30M
170.40M
-
-
670.40M
1.57B
3.04B
552.00M
3.63B
-
5.19B
6.10M
2.99B
- 26400.0K
-
April 1, 2022 at 6:00:00 AM
5.39B
5.00B
10.19B
-
3.21B
1.6B
3.40M
38.30M
- 129400.00K
- 4100.00K
-
-
-
- 53200.00K
- 57300.00K
- 700.00K
291.20M
1.67B
1.38B
478.60M
- 173800.00K
304.80M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ON
2023
2024
2025
2026
2027
$76.06
$223.92
$251.03
$281.41
$315.47