Jim Cramer Says ON Semiconductor (ON) is the Laggard Semi That Can Play Catch Up
ON Semiconductor (ON) fell 4.40% to $83 on October 7, but is up 72.72% over 12 months. Jim Cramer highlighted ON as a laggard semiconductor stock with catch-up potential, citing its renegotiated Synaptics deal and strong financials. The company reported 9.20% revenue growth and 33.20% earnings growth in the latest quarter, with a PEG ratio of 0.19. ON trades at 53.23x trailing earnings and 18.22x forward earnings, with a market cap of $32.12 billion.
How this was made
The 30-second read
Why it matters
The recast cash deal reduces acquisition risk, potentially unlocking value for ON shareholders.
Market read
Cramer's endorsement may prompt short covering and buying interest in ON, especially given its steep valuation discount.
What to watch
ON's exposure to automotive cycles and debt levels may constrain upside despite the deal.
Background
Jim Cramer highlighted ON Semiconductor as a lagging semiconductor that could catch up after a revised Synaptics acquisition.
Ticker impact
Cramer cites ON Semiconductor's recast Synaptics deal and low valuation as a catalyst for a potential price rebound.
likely upside as the market prices in the lower acquisition cost and valuation discount
The cash‑only deal removes the overhang of a stock‑based payment, and the stock trades at a steep earnings multiple discount, suggesting room for a rally.
Market effects
If ON rallies, other undervalued semiconductor stocks may see relative strength.
Limited to U.S. semiconductor sector.
Modest; primarily affects U.S. tech investors.
Counterpoint
The stock's high beta and short interest could amplify downside if broader chip sentiment weakens.
Key entities
- companyON Semiconductor Corporation
US‑listed semiconductor manufacturer (NASDAQ:ON).
- companySynaptics
Target of ON's acquisition, now at $5.7 billion cash.
