ON Semiconductor (NasdaqGS:ON) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

ON Semiconductor Corporation (NasdaqGS:ON) is scheduled to report Q3 earnings results before markets open for trading on November 2, 2020.

The company is expected to report earnings of $0.20/share on revenue of $1.275 billion. The consensus earnings per share (EPS) of $0.20/share is based on a poll of 24 analysts and represents a decline in eps of −39.1% over the same quarter last year, when the company reported earnings of $0.33/share.

The revenue forecast of $1.275 billion based on a poll of 21 analysts implies a year-over-year (YoY) decline in revenue of −7.7%. Last year the company reported $1.382 billion in revenue for the quarter.

Expected to report EPS contraction of −39.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,274.89 $1,381.80 −7.7%
EPS $0.20 $0.33 −39.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed 3 quarters.

What are your expectations from ON Semiconductor Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.02 $0.12 544.8% Beat
Q1, 2020 $0.15 $0.10 −34.3% Missed
Q4, 2019 $0.32 $0.30 −7.5% Missed
Q3, 2019 $0.36 $0.33 −8.1% Missed
Q2, 2019 $0.41 $0.42 1.8% Beat
Q1, 2019 $0.39 $0.43 9.4% Beat
Q4, 2018 $0.47 $0.53 11.8% Beat
Q3, 2018 $0.51 $0.57 12.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 3, 2020, the stock price reacted by increasing 5.18%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 8, 2020 $20.84 $21.92 5.18% Increase
May 9, 2020 $17.12 $15.66 -8.53% Decline
February 3, 2020 $23.15 $19.82 −14.4% Decline
October 27, 2019 $19.18 $21.21 10.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.95, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.95 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

ON Semiconductor Corporation is currently trading at $25.55/share, down −2.3% for the day. The company is trading at approximately 95.2% of its 52-week high of $26.84/share. The company’s stock price is up 22.6% since the last earnings report and down −2.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 59.97 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:ON Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −535.54 and a forward P/E multiple of 38.41.

ON Semiconductor Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.24. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date July 3, 2020
Stock Price (Current) $25.55
P/E Ratio −535.5x
P/E Ratio (Fwd) 38.4x
PEG Ratio 5.3
Total Debt / Total Capital 31.2%
Levered Free Cash Flow $225 million
EV / EBITDA 12.7x

Finbox

ON Semiconductor Corporation is a large-cap stock with a market capitalization of $10.496 billion and a total enterprise value of $13.347 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

ON Semiconductor Corporation, together with its subsidiaries, manufactures and sells semiconductor components for various electronic devices worldwide. The company operates in three segments: Power Solutions Group (PSG), Advanced Solutions Group (ASG), and Intelligent Sensing Group (ISG). The PSG segment offers analog, discrete, module, and integrated semiconductor products for various applications, such as power switching and conversion, signal conditioning, circuit protection, signal amplification, and voltage regulation functions. The ASG segment designs and develops analog, mixed-signal, logic, Wi-Fi, and application specific integrated circuits and standard products, as well as power solutions for various end-users in the automotive, consumer, computing, industrial, communications, medical, and aerospace/defense markets. It also provides trusted foundry and design services for government customers; and manufacturing services. The ISG segment offers complementary metal oxide semiconductors and charge-coupled device image sensors, proximity sensors, image signal processors, single photon detectors, and actuator drivers for autofocus and image stabilization for a range of customers in automotive, industrial, consumer, wireless, medical, and aerospace/defense markets. The company serves original equipment manufacturers, distributors, and electronic manufacturing service providers. ON Semiconductor Corporation was incorporated in 1992 and is headquartered in Phoenix, Arizona.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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