onsemi (NASDAQ:ON) Releases Earnings Results, Beats Estimates By $0.02 EPS

onsemi (NASDAQ:ON) released its quarterly earnings results on Monday. The semiconductor company reported $0.74 earnings per share for the quarter, topping analysts’ consensus estimates of $0.72 by $0.02, Zacks reports. The business had revenue of $1.60 billion during the quarter, compared to analysts’ expectations of $1.59 billion. onsemi had a return on equity of 12.79% and a net margin of 9.46%. onsemi updated its Q3 2026 guidance to 0.810-0.930 EPS.

Here are the key takeaways from onsemi’s conference call:

• Q2 results exceeded guidance: Revenue reached $1.6 billion, non-GAAP gross margin was 39.3%, and non-GAAP EPS was $0.74. Free cash flow rose to $425 million, while the company returned $332 million through share repurchases.
• AI data center momentum accelerated: ON Semiconductor now expects AI data center revenue to more than double in 2026, supported by wins with Nvidia’s MGX ecosystem, AWS-related platforms, and China’s Great Wall. The company is expanding content across the power chain as demand shifts toward 800-volt DC architectures.
• Growth opportunities broadened across energy and automotive: Energy storage system revenue is expected to increase approximately 40% in 2026, while China automotive revenue grew 13% in the first half despite lower vehicle sales. China automotive silicon carbide revenue is projected to rise 60% to 70% year over year, driven by market-share gains and new vehicle programs.
• Third-quarter outlook implies continued operating leverage: Revenue is forecast at $1.65 billion to $1.75 billion, with non-GAAP gross margin of 40% to 42% and EPS of $0.81 to $0.93. Management expects utilization-related margin benefits to continue, although the full effect may emerge with a lag.
• Supply constraints and the Synaptics acquisition remain key developments: Lead times have extended, orders within lead time are increasing, and the company is implementing price increases to offset higher input costs. ON Semiconductor expects its acquisition of Synaptics to close in mid-2027, subject to customary approvals.

onsemi Stock Down 1.5%

Shares of ON traded down $1.21 during mid-day trading on Monday, hitting $80.40. 14,637,881 shares of the company’s stock were exchanged, compared to its average volume of 10,645,545. The stock’s 50-day moving average is $105.00 and its 200-day moving average is $84.92. The company has a debt-to-equity ratio of 0.41, a quick ratio of 3.14 and a current ratio of 4.87. onsemi has a fifty-two week low of $44.56 and a fifty-two week high of $134.92. The company has a market cap of $31.51 billion, a price-to-earnings ratio of 57.02, a P/E/G ratio of 0.90 and a beta of 2.01.

Institutional Investors Weigh In On onsemi

Several large investors have recently added to or reduced their stakes in the business. Compound Planning Inc. acquired a new position in shares of onsemi in the fourth quarter worth $247,000. Corient Private Wealth LLC boosted its holdings in onsemi by 35.1% in the fourth quarter. Corient Private Wealth LLC now owns 109,895 shares of the semiconductor company’s stock valued at $5,951,000 after purchasing an additional 28,551 shares during the period. EP Wealth Advisors LLC purchased a new position in onsemi in the fourth quarter valued at $418,000. Empowered Funds LLC grew its stake in onsemi by 9.3% during the 4th quarter. Empowered Funds LLC now owns 26,322 shares of the semiconductor company’s stock worth $1,425,000 after purchasing an additional 2,241 shares in the last quarter. Finally, Yaupon Capital Management LP acquired a new position in onsemi during the 4th quarter worth $19,146,000. 97.70% of the stock is owned by hedge funds and other institutional investors.

onsemi News Summary

Here are the key news stories impacting onsemi this week:

• Positive Sentiment: onsemi reported second-quarter revenue of $1.604 billion, up 9% year over year, while non-GAAP EPS of $0.74 exceeded the $0.72 consensus estimate. Growth was supported by strengthening demand for AI-related applications, Treo products and high-voltage power solutions. onsemi Reports Second Quarter 2026 Results
• Positive Sentiment: Profitability and cash generation improved substantially: GAAP net income rose to $226.8 million from $170.3 million a year earlier, operating cash flow increased 150%, and free cash flow reached $425.4 million. The company also repurchased $332 million of stock during the quarter. ON Semiconductor Reports Higher Profit and Revenue
• Positive Sentiment: Management projected third-quarter revenue of approximately $1.65 billion to $1.75 billion and GAAP diluted EPS of $0.79 to $0.91. AI data-center revenue is expected to more than double during 2026, providing an important growth catalyst. On Semi Reports Strong Q2 Earnings
• Positive Sentiment: onsemi announced a planned Synaptics acquisition, expanded its role in NVIDIA’s MGX ecosystem and launched its GaNEXUS gallium nitride power portfolio, broadening its exposure to AI infrastructure and power-management demand.
• Neutral Sentiment: The earnings beat was modest, with revenue only slightly above consensus, while the forward revenue outlook was broadly in line with expectations. That may have limited the immediate upside reaction after the report.
• Negative Sentiment: Investor sentiment may be pressured by valuation and positioning: onsemi trades at a relatively elevated earnings multiple, and its 50-day moving average is well above its 200-day average, increasing volatility risk.
• Negative Sentiment: Insider activity remains a headwind. Company executives, including the CEO, CFO and business-group presidents, have reported open-market sales but no purchases during the past six months, which may reinforce near-term profit-taking concerns.

Analysts Set New Price Targets

Several research analysts have weighed in on ON shares. Jefferies Financial Group increased their target price on shares of onsemi from $73.00 to $115.00 and gave the stock a “buy” rating in a research note on Tuesday, May 5th. Zacks Research lowered shares of onsemi from a “strong-buy” rating to a “hold” rating in a report on Monday, July 6th. UBS Group reaffirmed a “neutral” rating and set a $95.00 price objective on shares of onsemi in a research report on Monday, June 29th. Rosenblatt Securities lifted their target price on shares of onsemi from $60.00 to $85.00 and gave the company a “neutral” rating in a report on Tuesday, May 5th. Finally, Wells Fargo & Company cut their target price on onsemi from $140.00 to $130.00 and set an “overweight” rating on the stock in a research report on Monday, July 20th. Fourteen investment analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, onsemi presently has a consensus rating of “Hold” and an average target price of $102.24.

onsemi Company Profile

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions.