Why Is ON Semiconductor Corp. (ON) Down 11.6% Since Last Earnings Report?

A month has gone by since the last earnings report for ON Semiconductor Corp. (ON). Shares have lost about 11.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ON Semiconductor Corp. due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for ON Semiconductor Corporation before we dive into how investors and analysts have reacted as of late.

ON Semiconductor's Q4 Earnings Beat Estimates, Revenues Down Y/Y

onsemi reported fourth-quarter 2025 non-GAAP earnings of 64 cents per share, which beat the Zacks Consensus Estimate by 3.23% but plunged 32.6% year over year.

Revenues of $1.53 billion missed the Zacks Consensus Estimate by 0.19% and decreased 11.2% on a year-over-year basis.

ON’s Q4 Quarter Details

Power Solutions Group's revenues of $724.2 million (contributed 47.3% to revenues) decreased 10.5% year over year. Analog & Mixed Group revenues of $556.3 million (36.4% of revenues) decreased 8.9% on a year-over-year basis. Intelligent Sensing Group revenues of $249.6 million (16.3% of revenues) decreased 17.5% year over year.

Non-GAAP gross margin was 38.2% compared with 45.3% reported in the year-ago quarter.

Non-GAAP operating expenses decreased 12.2% year over year to $282 million. As a percentage of revenues, operating expenses decreased 20 bps year over year.

Non-GAAP operating margin was 19.8% compared with 26.7% reported in the year-ago quarter.

ON’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, ON had cash and cash equivalents of $2.55 billion compared with $2.87 billion as of Oct. 3, 2025. Long-term debt, as of Dec. 31, 2025, was $2.98 billion, down 11.1% sequentially.

Fourth-quarter 2025 cash flow from operations amounted to $554.5 million compared with the previous quarter’s reported figure of $418.7 million.

Free cash flow amounted to $485.4 million compared with free cash flow of $372.4 million in the previous quarter.

ON Offers Q1 Guidance

For the first quarter of 2026, onsemi expects revenues between $1.44 billion and $1.54 billion. Non-GAAP gross margin is projected to be in the range of 37.5-39.5%.

Non-GAAP operating expenses are expected to be in the range of $285-$300 million.

Non-GAAP earnings are expected to be between 56 cents and 66 cents per share.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

VGM Scores

Currently, ON Semiconductor Corp. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, ON Semiconductor Corp. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Radical New Technology Could Hand Investors Huge Gains

Quantum Computing is the next technological revolution, and it could be even more advanced than AI.

While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.

Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.

Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.

See Top Quantum Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ON Semiconductor Corporation (ON): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research