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ON Semiconductor Corp. (ON) Gains But Lags Market: What You Should Know

In the latest trading session, ON Semiconductor Corp. (ON) closed at $65.50, marking a +1.88% move from the previous day. The stock lagged the S&P 500's daily gain of 1.97%. Elsewhere, the Dow gained 1.88%, while the tech-heavy Nasdaq added 0.24%.

Coming into today, shares of the semiconductor components maker had lost 6.79% in the past month. In that same time, the Computer and Technology sector lost 11.71%, while the S&P 500 lost 9.93%.

Wall Street will be looking for positivity from ON Semiconductor Corp. as it approaches its next earnings report date. The company is expected to report EPS of $1.31, up 50.57% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.12 billion, up 21.75% from the year-ago period.

ON's full-year Zacks Consensus Estimates are calling for earnings of $5.13 per share and revenue of $8.26 billion. These results would represent year-over-year changes of +73.9% and +22.57%, respectively.

It is also important to note the recent changes to analyst estimates for ON Semiconductor Corp.These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. ON Semiconductor Corp. currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ON Semiconductor Corp. has a Forward P/E ratio of 12.54 right now. Its industry sports an average Forward P/E of 13.8, so we one might conclude that ON Semiconductor Corp. is trading at a discount comparatively.

We can also see that ON currently has a PEG ratio of 0.49. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 0.8 based on yesterday's closing prices.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 95, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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