QS Research · Michael Burry's Scion Capital analyst template · 2006
ON SEMICONDUCTOR CORP (ON)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +23% · downside -1% · upside +60%
Section 13's $49-$61 base applies 20-25x normalized EBIT, but the template requires the company's own multiple today, so I use the 31.6x EV/EBIT (N29) on the same $968.6M normalized EBIT (N37): 31.6 x $968.6M = $30.6B EV, less $0.32B net debt and leases (N24/N23) = $30.3B / 389.28M shares (N5) = about $77.8, or +23%. The downside uses TTM EBIT $783.6M (N13) at the same 31.6x, giving about $62.8 (-1%), and the upside uses FY2023 revenue $8.25B at the 15.2% cycle margin (N38) = $1.25B EBIT at 31.6x, giving about $101 (+60%). The market is not missing the trough - it is pricing TTM EBIT - but it is not paying for normalized recovery either; with a +23% base the long rule fails (+30% required), and with a near-flat downside the short rule fails. Q3 2026 margin expansion and AI data center growth are real dated catalysts, but the balance sheet and FCF protect the downside without giving enough base-case upside at today's multiple, so this is a watch.
Key numbers
- Share price: $63.31
- Market cap: $24.65B
- Latest financial period: TTM to Oct 2, 2026
- Revenue (TTM): $6.37B
- EV / EBITDA (TTM): 15.8x
- P/E (TTM): 35.8x
- Price / book: 3.26x
The 15 boxes
- ✓ 1. Long-form business notes
ON Semiconductor makes money by selling semiconductor products—power, analog/mixed-signal and sensing—primarily through distributors and direct customers; at Dec 31 2025 it reported PSG/AMG/ISG segments with FY2025 revenue mix of 47%/38%/15% and end-market mix of automotive 51%, industrial 28% and other 21%. FY2025 revenue was $6.00B and operating income $84.2M, down from FY2022's $8.33B and $2.36B, and FY2025 operating income carries large restructuring, impairment and inventory charges, so the annual result is a cyclical trough rather than a clean run-rate. The oldest FY2020 10-K shows PSG/ASG/ISG and a gross-margin/lighter-fab strategy; the latest FY2025 10-K shows AMG, right-sizing and acquisitions. The supplied sources do not include the KEY NUMBERS normalized operating income or TTM table.
- ✓ 2. Competitive advantage
The sources do not show a durable competitive advantage. ON claims segment-specific strengths in power technology, analog design and imaging, but the 10-K names large competitors in every segment and says some have greater financial resources. The FY2020-FY2025 record is sharply cyclical: revenue peaked at $8.33B in FY2022 and fell to $6.00B in FY2025, while operating income fell from $2.36B to $84.2M.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended October 2, 2026) was a clear cyclical upturn: revenue $1,722.3M, up 11% year over year and 7% sequentially, with GAAP gross margin 41.4% (vs 37.9% a year ago) and GAAP operating income $378.3M / 22.0% margin (non-GAAP 23.2%). Growth came from PSG (industrial and AI data center), while AMG and ISG gross margins slipped; the nine-month comparison is flattered by the absence of $235.8M of prior-year excess/obsolete inventory charges. Q4 2026 guidance is numeric (revenue $1,715-$1,815M, GAAP EPS $0.88-$1.00), and the 10-Q's only risk-factor change relates to the pending Synaptics merger.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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