• Wondering if ON Semiconductor at around US$105.77 is still offering value, or if the easy money has already been made.
• The stock has returned 7.0% over the last week, 66.6% over the last month, 86.5% year to date and 172.6% over the past year, with longer term 3 year and 5 year returns of 32.4% and 196.5%.
• Recent price action has kept ON Semiconductor in focus as investors weigh how current expectations line up with the company’s positioning in the semiconductor sector. Broader interest in chips tied to electrification, power management and AI infrastructure has also helped frame how investors look at ON Semiconductor stock.
• Despite this, ON Semiconductor currently has a valuation score of 0 out of 6, so the next sections will walk through what different valuation methods say about the stock and point to a more complete way to think about value by the end of the article.

ON Semiconductor scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: ON Semiconductor Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes forecast cash flows that a company may generate in the future and discounts them back to today to estimate what the entire business could be worth right now.

For ON Semiconductor, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $744.7 million. Analyst and extrapolated projections used in the model show discounted free cash flows stepping up from around $1.3 billion in 2026 to about $1.1 billion in 2035, all expressed in today’s money using a discount rate.

Putting those discounted cash flows together, Simply Wall St’s model arrives at an estimated intrinsic value of about $73.77 per share. Against a current share price around $105.77, the DCF implies the stock is roughly 43.4% overvalued on this set of assumptions.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests ON Semiconductor may be overvalued by 43.4%. Discover 44 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: ON Semiconductor Price vs Earnings

For profitable companies, the P/E ratio is a useful way to link what you pay for the stock to the earnings the business is already generating. It gives you a quick sense of how many dollars of price you are paying for each dollar of earnings.

What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually lines up with a lower multiple.

ON Semiconductor currently trades on a P/E of 72.25x, compared with the Semiconductor industry average of 53.66x. Simply Wall St also looks at peers, which on average trade on a P/E of 42.53x. To go a step further, Simply Wall St calculates a proprietary “Fair Ratio” of 48.39x, which is the P/E that would typically line up with ON Semiconductor’s earnings growth profile, profit margins, industry, market cap and risk factors.

This Fair Ratio approach can be more informative than a simple peer or industry comparison because it adjusts for company specific characteristics rather than assuming all semiconductor stocks should trade on the same multiple. Comparing 72.25x to the Fair Ratio of 48.39x suggests the stock is trading above this fair value range.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your ON Semiconductor Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are a simple way for you to write your own story for ON Semiconductor by linking what you think about its business, such as future revenue, earnings and margins, to a financial forecast and an assumed fair value, then comparing that fair value to the current share price to decide whether the stock looks expensive or cheap on your numbers.

On Simply Wall St’s Community page, investors can use Narratives to set out these views in a structured way, and the platform updates those Narratives automatically when new information like news, guidance or earnings is added so your story and fair value do not stay frozen in time.

For example, one ON Semiconductor Narrative on the bearish end assumes a fair value around US$73.15 per share, while another more optimistic view sees fair value closer to US$78.63. Those differences come from contrasting stories about issues such as geopolitics, competition, demand for EV and AI related chips, future margins, earnings and the P/E that might be reasonable several years from now.

Do you think there's more to the story for ON Semiconductor? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.