Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
"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 solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, ONNN's share price has jumped by 29.54%, 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.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 16.5%. 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.
- Net operating cash flow has significantly increased by 54.09% to $92.30 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.94%.
- 41.76% 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. Despite the strong results of the gross profit margin, ONNN's net profit margin of 4.99% significantly trails the industry average.
- You can view the full analysis from the report here: ONNN Ratings Report
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