onsemi Q1 revenue beats analyst estimates on AI data center growth

Overview

• US semiconductor maker's Q1 revenue rose 5%, beating analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company repurchased $346 mln in shares, about 160% of free cash flow

Outlook

• onsemi expects Q2 revenue between $1.54 bln and $1.64 bln

• Company sees Q2 non-GAAP diluted EPS of $0.65 to $0.77

• onsemi forecasts Q2 non-GAAP gross margin of 38.0% to 40.0%

Result Drivers

• AI DATA CENTER GROWTH - Co said AI data center revenue more than doubled year-over-year due to broader adoption across the power tree with multiple chip vendors and hyperscalers

• OPERATIONAL IMPROVEMENTS - Co said operational improvements delivered strong operating leverage and a 10% year-over-year increase in operating income, outpacing revenue growth by 2x, per CFO Thad Trent

• AUTOMOTIVE AND INDUSTRIAL DEMAND - Co highlighted increasing semiconductor content in automotive, industrial and AI data center applications as long-term growth drivers

Company press release: ID:nGNX70g0jZ

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 20 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for ON Semiconductor Corp is $72.56, about 29.6% below its May 1 closing price of $103.03

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 21 three months ago

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