Onsemi (NASDAQ:ON) Hits New 1-Year Low - Should You Sell?

Onsemi (NASDAQ:ON) recently reached a new 12-month low in its stock price on Wednesday, trading as low as $41.85 before closing at $42.86. In total, 9,005,844 shares were exchanged during this trading session, marking a significant drop from the previous close of $44.16.

Analysts Provide Insights on Onsemi's Future

Many financial analysts have shared their perspectives on Onsemi's stock. For instance, JPMorgan Chase & Co. lowered their price target for Onsemi from $88.00 to $60.00, designating a "neutral" rating in their report on February 11. KeyCorp also revised their target, bringing it down from $90.00 to $70.00, and maintaining an "overweight" rating. Additionally, Roth Capital established a price target of $60.00, while Benchmark decreased their objective from $90.00 to $60.00, issuing a "buy" rating. Truist Financial followed suit by reducing their price objective from $60.00 to $52.00 and suggesting a "hold" rating.

Currently, the stock holds a dual perspective among analysts, with two offering a sell rating, nine recommending a hold, and fifteen advocating for a buy. Based on insights from MarketBeat.com, Onsemi has an average rating categorized as a "Moderate Buy" and a median price target of $66.85.

Reviewing Onsemi's Stock Performance

Onsemi's market capitalization is approximately $18.06 billion, with a price-to-earnings (P/E) ratio of 11.81. The company's P/E growth (P/E/G) ratio stands at 16.74, and its stock has a beta value of 1.59. Financial metrics reveal a debt-to-equity ratio of 0.38, a current ratio of 5.06, and a quick ratio of 3.38. The stock has averaged $52.80 over the past 50 days, while its 200-day average is $63.80.

Recently, Onsemi reported its earnings results on February 10, revealing an earnings per share (EPS) of $0.95 for the quarter, which was slightly below analysts' expectations of $0.98 by $0.03. The company experienced a return on equity of 20.10% along with a net profit margin of 22.21%. Looking ahead, analysts forecast Onsemi to achieve an EPS of 2.6 for the ongoing fiscal year.

Institutional Investor Activity

Recent activity among institutional investors reflects changes in their holdings of Onsemi stock. Truvestments Capital LLC increased its stake by 3.8% during the fourth quarter, now possessing 5,661 shares worth $357,000. Assetmark Inc. modestly raised its stake by 0.3%, owning 78,495 shares valued at $4,949,000. Similarly, Metis Global Partners LLC increased its position by 1.8%, totaling 13,711 shares worth $996,000.

Further, V Square Quantitative Management LLC raised their holdings by 3.9%, owning 6,727 shares valued at $424,000. Huntington National Bank boosted its investment by 8.9%, accumulating 3,310 shares valued at $209,000. In total, hedge funds and institutional investors control about 97.70% of Onsemi's stock.

Understanding Onsemi's Business Model

Onsemi focuses on providing innovative solutions within the semiconductor industry. The company plays a significant role in various sectors, including vehicle electrification, industrial automation, sustainable energy grids, as well as 5G and cloud technology. It operates through three main segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group.

Key Takeaways for Investors

Before making any investment decisions about Onsemi, consider the performance and ratings indicated above. While analysts provide a current "Moderate Buy" rating, it is essential to evaluate whether this aligns with your investment strategy and risk tolerance. Investment experts from various firms have their recommendations, and investors may find benefit in exploring other options that ranking analysts favor more strongly.

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