Skip to main content

NEW YORK (TheStreet) -- Shares of ON Semiconductor (ONN) were falling 1.7% to $11.70 with heavy trading volume Thursday as semiconductor stocks fell for a second day.

About 7.1 million shares of ON Semiconductor were traded by 2:55 p.m. Thursday, above the company's average trading volume of about 6.7 million shares a day.

Semiconductors stocks were falling after SanDisk (SNDK) lowered its first quarter revenue forecast. SanDisk said it now expects revenue of about $1.3 billion for the first quarter. The chipmaker previously forecasted first quarter revenue in the range of $1.4 billion to $1.45 billion. Analysts expect the company to report earnings of $1.44 billion for the quarter.

The lower revenue forecast is due to "certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business," SanDisk said. The company also lowered its full year 2015 revenue forecast but did not provide a definite range for its current forecast.

Insight from TheStreet's Research Team:

Scroll to Continue

TheStreet Recommends

ON Semiconductor is a core holding of David Peltier's Stocks Under $10 Portfolio. During the most recent weekly roundup, this is what Dave had to say about the stock: 

ON Semiconductor (ONNN; 500 shares; 3.52%; Stealth Stock; $13.50 price target): The company makes analog, standard logic and discrete semiconductors for use in data and power management. The shares gained this week, along with the broader market. We continue to believe that ON Semiconductor offers investors growth at an attractive price.

-David Peltier, "Stocks Under $10 Weekly Roundup," originally published 3/20/15 on$10

Separately, TheStreet Ratings team rates ON SEMICONDUCTOR CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ON SEMICONDUCTOR CORP (ONNN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ONNN's revenue growth has slightly outpaced the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, ONNN's share price has jumped by 33.57%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ONNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $162.50 million or 27.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.69%.
  • 40.28% is the gross profit margin for ON SEMICONDUCTOR CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.06% is in-line with the industry average.
  • ON SEMICONDUCTOR CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ON SEMICONDUCTOR CORP increased its bottom line by earning $0.42 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.42).
  • You can view the full analysis from the report here: ONNN Ratings Report