A Look at onsemi’s Valuation Following Teledyne’s Selection of Treo Platform for Infrared Imaging Systems

ON Semiconductor (ON) just revealed that Teledyne Technologies will use its Treo platform for the next wave of readout integrated circuits in infrared imaging systems. This move highlights ON’s ongoing push into mission-critical and specialty semiconductor markets.

See our latest analysis for ON Semiconductor.

While ON’s partnership with Teledyne marks another step into high-stakes applications, the stock itself has had a tougher run lately. Despite big moves in the sector and recent expansion of its power management and imaging technology portfolio, ON Semiconductor’s 1-year total shareholder return has slumped to -30.2%. Its 5-year total return is still up nearly 99%. Ongoing volatility reflects both shifting expectations for semiconductor demand and investor debate over the timing of a sector rebound.

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With recent client wins and a portfolio built for long-term growth, is ON Semiconductor’s current price an entry point for value-seeking investors, or is the market already anticipating all the upside on offer?

Most Popular Narrative: 10.7% Undervalued

Compared to ON Semiconductor’s previous close, the most popular narrative projects notable upside potential based on anticipated gains in markets the company is targeting. Strong catalysts are cited by followers to explain why this gap could close.

ON Semiconductor's expanding partnerships and design wins in EV platforms (notably in China) and its increased penetration into next-generation automotive and hybrid vehicle systems position the company to capitalize on the accelerating shift to electrified and autonomous transportation. These tailwinds are likely to drive higher recurring revenues and improved top-line growth.

Read the complete narrative.

Curious about the foundation of this bullish view? There is a bold quantitative call on future growth here, with core operating trends and investment in new technologies playing a starring role. The driver behind these projections could change how the market values ON. Dig into the complete narrative to see the key financial levers at work.

Result: Fair Value of $57.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent manufacturing underutilization and fierce competition in EV and image sensing markets could present challenges for ON Semiconductor’s path to improved margins and growth.

Find out about the key risks to this ON Semiconductor narrative.

Build Your Own ON Semiconductor Narrative

If the consensus doesn’t align with your perspective, or you enjoy digging into the numbers firsthand, you can easily craft your own view in just a few minutes. Do it your way

A great starting point for your ON Semiconductor research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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