Analyst Note| Brian Colello, CPA |
Narrow-moat ON Semi kicked off 2021 with the top line marginally exceeding our expectations and falling within management’s prior guidance range. With broad-based growth within this quarter and strong guidance for the upcoming one, ON Semi is benefiting from an economic rebound after a challenging 2020. Management reiterated its ambitions to expand margins by committing to making further structural changes to the business. We are maintaining our $30 fair value estimate for the company. With shares trading around $39, we recommend investors wait for a pullback before committing new capital to the name.