ON Should I Buy
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ON Semiconductor Corp is not a strong buy for a beginner investor with a long-term strategy at this time. The company's recent financial performance shows significant declines in revenue, net income, and EPS. While there are some positive developments, such as improving gross margins and product portfolio enhancements, the overall sentiment from analysts and insiders is mixed, with limited near-term upside. Additionally, the lack of strong proprietary trading signals and insider selling further supports a cautious approach.
The technical indicators show a mixed picture. The MACD is positive and expanding, indicating bullish momentum. The RSI is in the neutral zone, suggesting no overbought or oversold conditions. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), and the stock is trading near its resistance level (R1: 71.384). However, the stock's recent candlestick pattern suggests a 50% chance of a short-term decline (-2.91% in the next day, -3.07% in the next week, -6.81% in the next month).
Analysts have raised price targets, with some maintaining a Buy rating.
Improving gross margins and stabilization in key markets.
Positive developments in AI data center and industrial markets, although long-term.
Significant insider selling, up 152.46% in the last month.
Revenue and net income declined significantly YoY in Q4
Analysts express concerns about near-term margin pressure and limited upside.
Hedge funds remain neutral, and there are no significant trading trends.
In Q4 2025, ON Semiconductor's revenue dropped by 11.17% YoY to $1.53 billion. Net income fell by 52.15% YoY to $181.8 million, and EPS declined by 48.86% YoY to $0.45. Gross margin also decreased by 20.58% YoY to 35.3%. While the company anticipates stabilization and growth, the recent financial performance indicates challenges.
Analyst sentiment is mixed. Some firms raised price targets (e.g., TD Cowen to $75, Deutsche Bank to $75) and maintain Buy ratings, citing improving bookings and backlog. However, others downgraded the stock or remain Neutral, citing limited near-term upside, margin pressures, and the need for a clearer growth inflection. The consensus reflects cautious optimism but no strong bullish sentiment.
