DCF Studio

    ON · NMS · Technology

    ON Semiconductor Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 45.17

    Market price

    USD 70.11

    Implied upside

    -35.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 11.6% of revenue against depreciation of 8.6%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 45.17-35.6%
    Exit multiple
    USD 94.34+34.6%
    Market price
    USD 70.11

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 6.6bnUSD 7.4bnUSD 8.2bnUSD 9.1bnUSD 9.9bnUSD 10.6bnUSD 11.3bnUSD 11.9bnUSD 12.3bnUSD 12.6bn+7.5%
    EBITUSD 1.7bnUSD 1.9bnUSD 2.1bnUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+7.5%
    NOPATUSD 1.5bnUSD 1.7bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.5bnUSD 2.7bnUSD 2.8bnUSD 2.8bn+7.5%
    Add depreciation & amortisationUSD 566.6mUSD 638.5mUSD 711.2mUSD 783.3mUSD 852.7mUSD 917.4mUSD 975.3mUSD 1.0bnUSD 1.1bnUSD 1.1bn+7.5%
    Less capital expenditureUSD -764.4mUSD -863.8mUSD -965.2mUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.3bnUSD -1.4bnUSD -1.5bnUSD -1.5bn+7.9%
    Capex, % of revenue11.6%11.7%11.7%11.8%11.8%11.8%11.9%11.9%11.9%12.0%-
    Less increase in working capitalUSD -190.1mUSD -278.3mUSD -282.1mUSD -279.2mUSD -268.9mUSD -250.7mUSD -224.5mUSD -190.6mUSD -149.8mUSD -103.0m-6.6%
    Free cashflow to firmUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.5bnUSD 1.6bnUSD 1.8bnUSD 1.9bnUSD 2.1bnUSD 2.2bnUSD 2.3bn+8.8%
    Discount factor0.94660.84810.75990.68090.61000.54660.48970.43880.39320.3523-
    Present valueUSD 1.0bnUSD 977.7mUSD 995.0mUSD 1.0bnUSD 995.6mUSD 978.8mUSD 951.0mUSD 913.1mUSD 866.2mUSD 811.7m-
    Present Value Of The ForecastUSD 9.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.771Reported 2.151, pulled toward 1.0 (Blume)
    Cost of equity12.39%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 10.6x interest cover. Book interest / average debt was lower, at 2.2%.
    Market capitalisationUSD 27.3bn90.1% of capital
    Total debtUSD 3.0bn9.9% of capital, book value as a proxy
    Tax rate14.1%Effective, capped at statutory
    WACC11.61%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 45.17

    50% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 2.8bn
    Less reinvestment at g/ROIC (14.9% of NOPAT)
    USD -420.0m
    Capitalised
    USD 2.4bn
    ROIC (reported)
    16.8%
    Terminal value, undiscounted
    USD 27.1bn
    Terminal value, discounted
    USD 9.5bn
    Enterprise value
    USD 19.1bn
    Less net debt
    USD 457.2m
    Equity value
    USD 18.6bn

    Exit at 19.3x EBITDA

    Value per shareUSD 94.34

    76% of EV

    Terminal value, undiscounted
    USD 84.6bn
    Terminal value, discounted
    USD 29.8bn
    Enterprise value
    USD 39.3bn
    Less net debt
    USD 457.2m
    Equity value
    USD 38.8bn

    Spread between methods: 70%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.61%57.8558.5459.3960.4361.71
    10.61%50.6850.9951.3851.8852.50
    11.61%44.9745.0545.1745.3445.59
    12.61%40.3340.2640.2140.2040.22
    13.61%36.4936.3236.1736.0435.93

    Outlined: this model. Green text: above today's price of 70.11. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-10.4%7.7%13.8%
    EBIT margin33.2%26.1%38.6%
    Discount rate-11.6%8.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.