Stock Dips but Shows Recovery Signs
Valuation Points to Modest Upside
Analysts set an average 12-month price target at $63.58, suggesting slight upside. Targets range from $50 to $80. At writing time, no same-day upgrades or downgrades appeared.
Quarterly Financial Performance (Q4 FY25)
onsemi faced weak demand, so its Q4 revenue fell. The company reported $1.53 billion in revenue, down from $1.55 billion last quarter and $1.72 billion a year ago. Margins contracted sharply; GAAP gross margin hit 36.0%, compared to 37.9% previously and 45.2% last year. Non-GAAP gross margin reached 38.2%. GAAP operating margin stood at 13.1%, while non-GAAP came in at 19.8%. Net income dropped to $181.8 million from $255.0 million in Q3 and $379.9 million a year earlier. GAAP EPS measured $0.45, and non-GAAP EPS hit $0.64.
Full-Year Results Weaken Significantly
For fiscal 2025, revenue declined to $5.99 billion from $7.08 billion in 2024. GAAP gross margin fell to 33.1% from 45.4%, and operating margin dropped to 1.4% from 25.0%. Net income plunged to $121.0 million versus $1.57 billion last year; GAAP EPS landed at $0.29. Despite this, onsemi generated $1.8 billion in operating cash flow and $1.4 billion in free cash flow. That delivered a record 24% free-cash-flow margin, and the company returned it all to shareholders through buybacks.
Segments Decline, One Grows Sequentially
Power Solutions Group revenue totaled $724.2 million, down 11% year-over-year. Advanced Mobility Group hit $556.3 million, off 9% YoY. Intelligent Sensing Group reported $249.6 million, down 17% YoY. Sequentially, however, only Intelligent Sensing grew.
Company Advances Strategy and Buybacks
onsemi authorized a new $6 billion share-repurchase program. It also pushed gallium nitride (GaN) efforts, partnering with GlobalFoundries and Innoscience for next-gen power devices. Management prioritizes automotive, industrial, and AI data-center markets. At the same time, they drive cost cuts and operating leverage.
Q1 Outlook Remains Cautious
For Q1 2026, onsemi forecasts revenue of $1.435 billion to $1.535 billion. GAAP diluted EPS will range from $0.28 to $0.38, while non-GAAP EPS targets $0.56 to $0.66. This guidance reflects ongoing demand caution, even as stabilization signs emerge.