ON Semiconductor Corp. (ON) Suffers a Larger Drop Than the General Market: Key Insights

In the latest trading session, ON Semiconductor Corp. (ON) closed at $66.34, reflecting a decline of -1.98% from the previous day. This downturn is more significant compared to the broader market, as the S&P 500 posted a smaller daily loss of 0.3%. The Dow Jones Industrial Average experienced a drop of 0.35%, while the Nasdaq Composite Index fell 0.25%.

Over the last month, ON Semiconductor's stock has seen a total decrease of 3.26%. During this time, the Computer and Technology sector has enjoyed a gain of 1.7%, and the S&P 500 itself has increased by 1.09%.

Investors are particularly eager to see how ON Semiconductor performs in its upcoming earnings report. Analysts predict that the company will announce an earnings per share (EPS) of $0.99, indicating a 20.8% decline from the same quarter of the last year. Additionally, the consensus estimate for revenue stands at $1.76 billion, reflecting a 12.73% drop year-over-year.

For the overall fiscal year, the Zacks Consensus Estimates project earnings of $4 per share and expected revenue of $7.12 billion, which correspond to falls of -22.48% and -13.7% compared to last year.

Investors should also consider any recent revisions in analyst estimates for ON Semiconductor Corp. Such changes can indicate evolving trends in the company's short-term business performance. Positive revisions are often a sign of analyst confidence in the company's potential for growth and profitability.

Research shows that these estimate revisions significantly influence short-term share price momentum. To aid investors, the Zacks Rank system has been developed, which takes into account these estimate changes to provide a useful rating system.

The Zacks Rank ranges from #1 (Strong Buy) to #5 (Strong Sell) and boasts an impressive track record; #1-rated stocks have averaged an annual return of +25% since 1988. Currently, ON Semiconductor holds a Zacks Rank of #3 (Hold), with a slight decline of 0.04% in the consensus EPS estimate over the last month.

In terms of valuation, ON Semiconductor is trading at a Forward P/E ratio of 16.91. By comparison, its industry has an average Forward P/E of 38.63, indicating that ON Semiconductor is currently valued at a discount relative to its competitors.

It is also noteworthy that ON Semiconductor has a PEG ratio of 7.26. Similar to the commonly used P/E ratio, the PEG ratio also accounts for the expected earnings growth rate. In contrast, the average PEG ratio for the Semiconductor - Analog and Mixed industry is 3.21 as of yesterday's market close.

This industry belongs to the broader Computer and Technology sector. At present, it holds a Zacks Industry Rank of 139, which places it in the bottom 45% of over 250 industries.

The Zacks Industry Rank evaluates the strength of specific industry groups by calculating the average Zacks Rank of each stock within them. Evidence shows that industries rated in the top 50% typically outperform those in the bottom half by a ratio of 2 to 1.

For the latest stock-influencing metrics and more, investors should keep an eye on market developments in the coming trading sessions.

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