Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)
P to FCFE Ratio, Current
P to FCFE Ratio, Historical

Free Cash Flow to Equity (FCFE)

ON Semiconductor Corp., FCFE calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to ON Semiconductor Corporation	2,183,700)	1,902,200)	1,009,600)	234,200)	211,700)
Net income attributable to non-controlling interest	1,900)	1,600)	1,600)	2,200)	2,200)
Net noncash charges	654,600)	979,700)	829,700)	646,600)	747,500)
Changes in assets and liabilities, exclusive of acquisitions and divestitures	(862,700)	(250,400)	(58,900)	1,300)	(266,700)
Net cash provided by operating activities	1,977,500)	2,633,100)	1,782,000)	884,300)	694,700)
Purchase of property, plant and equipment	(1,575,600)	(1,005,000)	(444,600)	(383,600)	(534,600)
Proceeds from sale of property, plant and equipment	4,000)	59,100)	14,000)	6,300)	1,900)
Deposits (made) utilized for purchases of property, plant and equipment	36,500)	(31,000)	(47,400)	2,200)	4,600)
Issuance and borrowings under debt agreements	1,845,000)	500,000)	787,300)	1,858,000)	1,404,800)
Reimbursement of debt issuance and other financing costs	4,500)	—)	2,700)	—)	—)
Payment of debt issuance and other financing costs	(12,400)	—)	(3,800)	(2,400)	(24,000)
Repayment of borrowings under debt agreements	(1,723,400)	(530,000)	(1,270,500)	(2,023,900)	(594,400)
Payment of finance lease obligations	(15,300)	(11,500)	—)	—)	(800)
Payment for purchase of bond hedges	(414,000)	—)	(160,300)	—)	—)
Free cash flow to equity (FCFE)	126,800)	1,614,700)	659,400)	340,900)	952,200)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The financial performance between 2019 and 2023 is characterized by a strong upward trajectory in operating cash flow, contrasted by significant volatility in free cash flow to equity (FCFE).

Operating Cash Flow Trends: Net cash provided by operating activities exhibited consistent growth from 2019 through 2022, increasing from US$ 694.7 million to a peak of US$ 2.63 billion. This indicates a substantial expansion in the capacity to generate cash from core business operations. A moderate contraction occurred in 2023, with operating cash flow declining to US$ 1.98 billion.
FCFE Volatility and Patterns: Free cash flow to equity demonstrated high variance throughout the period. Following an initial value of US$ 952.2 million in 2019, FCFE dropped to US$ 340.9 million in 2020 and recovered to US$ 659.4 million in 2021. A significant surge occurred in 2022, reaching US$ 1.61 billion, before a sharp decline to US$ 126.8 million in 2023.
Analysis of Cash Flow Divergence: A pronounced divergence is observed in 2023. Despite net cash from operating activities remaining relatively strong at US$ 1.98 billion, FCFE fell to its lowest level in the five-year sequence. This suggests that a significant portion of operating cash was diverted toward capital expenditures or debt repayment, thereby drastically reducing the residual cash available to equity holders.

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Price to FCFE Ratio, Current

ON Semiconductor Corp., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	430,231,889
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	126,800)
FCFE per share	0.29
Current share price (P)	70.82
Valuation Ratio
P/FCFE	240.29
Benchmarks
P/FCFE, Competitors¹
Advanced Micro Devices Inc.	146.86
Analog Devices Inc.	35.80
Applied Materials Inc.	64.26
Broadcom Inc.	69.88
Intel Corp.	—
KLA Corp.	65.20
Lam Research Corp.	95.37
Marvell Technology Inc.	125.70
Micron Technology Inc.	826.45
NVIDIA Corp.	56.11
Qualcomm Inc.	16.43
Texas Instruments Inc.	83.21
P/FCFE, Sector
Semiconductors & Semiconductor Equipment	243.64
P/FCFE, Industry
Information Technology	82.59

Based on: 10-K (reporting date: 2023-12-31).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Price to FCFE Ratio, Historical

ON Semiconductor Corp., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
No. shares of common stock outstanding¹	427,328,652	431,967,907	432,497,822	411,881,071	411,065,636
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	126,800)	1,614,700)	659,400)	340,900)	952,200)
FCFE per share³	0.30	3.74	1.52	0.83	2.32
Share price^1, 4	77.59	80.40	58.66	41.85	20.90
Valuation Ratio
P/FCFE⁵	261.49	21.51	38.47	50.56	9.02
Benchmarks
P/FCFE, Competitors⁶
Advanced Micro Devices Inc.	241.70	33.46	44.72	—	—
Analog Devices Inc.	22.28	24.14	34.67	33.98	—
Applied Materials Inc.	17.53	19.17	27.20	23.21	—
Broadcom Inc.	30.06	14.62	22.35	9.16	—
Intel Corp.	—	—	14.25	—	—
KLA Corp.	26.78	9.01	28.06	—	—
Lam Research Corp.	18.67	24.95	34.58	—	—
Marvell Technology Inc.	34.85	13.90	72.25	—	—
Micron Technology Inc.	—	18.66	37.24	81.71	—
NVIDIA Corp.	151.07	54.83	35.22	—	—
Qualcomm Inc.	11.97	19.13	17.93	34.91	—
Texas Instruments Inc.	37.61	23.88	21.87	—	—
P/FCFE, Sector
Semiconductors & Semiconductor Equipment	47.29	28.10	25.18	—	—
P/FCFE, Industry
Information Technology	33.12	26.68	27.39	—	—

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 126,800,000 ÷ 427,328,652 = 0.30

⁴ Closing price as at the filing date of ON Semiconductor Corp. Annual Report.

⁵ 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 77.59 ÷ 0.30 = 261.49

⁶ Click competitor name to see calculations.

The Price to Free Cash Flow to Equity (P/FCFE) ratio between 2019 and 2023 exhibits extreme volatility, characterized by a significant decoupling of share price growth and cash flow generation. While the market valuation increased substantially over the first four years, the underlying cash flow per share demonstrated an inconsistent pattern, resulting in erratic valuation multiples.

Share Price Trends: A consistent upward trajectory was observed from 2019 to 2022, with the share price rising from 20.90 US$ to a peak of 80.40 US$. A marginal correction occurred in 2023, with the price settling at 77.59 US$.
FCFE per Share Volatility: Free Cash Flow to Equity per share showed significant fluctuations throughout the period. After a decline in 2020 to 0.83 US$, FCFE grew steadily to a peak of 3.74 US$ in 2022. However, 2023 experienced a precipitous drop to 0.30 US$, representing a sharp contraction in the cash flow available to equity holders.
P/FCFE Ratio Interpretation: The P/FCFE ratio shifted from a relatively low 9.02 in 2019 to an anomalous 261.49 in 2023. The expansion in 2020 (50.56) was driven by simultaneous price appreciation and a dip in FCFE. The ratio compressed to 21.51 by 2022 as FCFE growth outpaced price gains. The extreme spike in 2023 is directly attributable to the collapse in FCFE per share while the share price remained relatively high, indicating a severe misalignment between market price and current cash flow generation.