Stock Analysis | On Semiconductor Outlook - Mixed Signals Amid Volatile Market Conditions

Market Snapshot

Takeaway: On Semiconductor (ON.O) remains in technical neutrality with a score of 5.1, suggesting a wait-and-see approach for investors as market volatility continues.

News Highlights

• McKinsey weighs in on tariffs and chip supply chains: New research from McKinsey & Co. highlights the potential impact of U.S. tariffs on the semiconductor sector. This could affect supply chain dynamics for companies like On Semiconductor.
• Japan to Offer U.S. Proposals for Cooperation on Rare Earths, Semiconductors: Japan and the U.S. are working on cooperation strategies in rare earths and semiconductors, which could offer long-term benefits for semiconductor players.
• Understanding indie Semiconductor's Financial Performance: While not directly about On Semiconductor, this report on indie Semiconductor (INDI) highlights broader industry challenges, including low Return on Invested Capital (ROIC), which could resonate with investors of ON.

Analyst Views & Fundamentals

Average Rating Score: The simple average rating is 3.77, while the performance-weighted rating is 1.90. This suggests that while analysts have mixed views, those with stronger historical performance have a more pessimistic outlook.

Rating Consistency: Analysts are split in their outlooks, with 7 "Neutral" ratings, 4 "Strong Buy," and 2 "Buy." The lack of consensus means investors should look at the broader fundamentals and technicals for direction.

Key Fundamental Factors and Scores:

• Net cash flow from operating activities per share (YoY growth rate %): -5.56% (Internal diagnostic score: 1.00)
• Gross profit margin (GPM): 37.58% (Internal diagnostic score: 8.47)
• Accounts receivable turnover ratio: 2.79 (Internal diagnostic score: 3.00)
• Gross margin ratio (GMAR): 37.58% (Internal diagnostic score: 8.47)
• Cash-UP: -113.80% (Internal diagnostic score: 2.00)
• Net cash flow from operating activities / Total liabilities (%): 15.23% (Internal diagnostic score: 8.47)
• CFOA: 1.40% (Internal diagnostic score: 8.47)
• GPOA: 4.20% (Internal diagnostic score: 8.47)
• Interest coverage ratio (EBIT / Interest expense) (%): -89.85% (Internal diagnostic score: 0.00)
• Total assets turnover ratio: 21.42% (Internal diagnostic score: 8.47)

The mixed scores indicate some strong financial metrics like GPM and CFOA, but weaker indicators like Cash-UP and Interest coverage ratio suggest areas of concern.

Money-Flow Trends

Big Money vs. Retail Flows:

• Small-inflow ratio: 49.82% (negative trend)
• Medium-inflow ratio: 49.99% (negative trend)
• Large-inflow ratio: 49.76% (negative trend)
• Extra-large-inflow ratio: 58.57% (positive trend)
• Overall inflow ratio: 55.16% (positive trend)
• Block inflow ratio: 57.17% (positive trend)

While retail investors remain cautious (negative trends in small, medium, and large inflow ratios), institutional investors are showing a more bullish sentiment, with strong inflows in extra-large and block trades.

Key Technical Signals

Internal Diagnostic Scores (0-10):

• RSI Oversold: 8.47 (Strong bullish signal)
• Bearish Engulfing: 7.64 (Neutral rise)
• WR Oversold: 3.37 (Neutral rise)
• MACD Golden Cross: 5.71 (Neutral rise)
• Marubozu White: 4.05 (Neutral rise)
• WR Overbought: 1.35 (Neutral bias)

Recent indicators on 2025-08-22 include WR Overbought, MACD Golden Cross, and Marubozu White, while 2025-08-11 saw WR Oversold, Bearish Engulfing, and RSI Oversold.

Key Insights: The technical analysis suggests a volatile market with unclear direction. The balance between bullish and bearish indicators implies a period of consolidation. Investors are advised to closely monitor market changes for potential breakout signals.

Conclusion

Actionable Takeaway: On Semiconductor is currently in technical neutrality with a score of 5.1. While institutional flows are positive, mixed analyst ratings and volatile technical indicators suggest a cautious approach. Investors should consider waiting for clearer signals before making new positions.