On Semiconductor: Underdog moat of AI power play

On Semiconductor

The company is currently trading at $56.26 per share at TTM Price-to-earning(P/E) ratio of 13.69, approximately, with a forward P/E ratio of 13.92.

The enterprise value to EBITDA (EV/EBITDA) is about 8.89, with profit margin of 23.8%.

Analysts’ consensus estimates for the upcoming quarter project earnings per share (EPS) between $0.92 and $1.04, with revenue expectations ranging from $1.7 billion to $1.8 billion.

Based on the estimates, the calculated intrinsic value of the forecasted share price lies between $52 to $57.9 range.

Focus Industries: Automotive, industrial, and IoT markets.

Strengths:
1. Leader of the product segment.
2. Growth in EV and ADAS solution.
3. Vertical integration mitigating supply chain risks and reaching operational efficiency.
4. Global operating segments - Optimism grown alongside with interest rate optimism tailwind.

Weakness:
1. Dependence on cyclical markets
2. Limited presence in certain high-growth segments
3. High CAPEX limiting shareholder return

Key Customers:
1. Tesla, GM, Ford, and other automotive manufacturers.
2. Dell, HP, and Cisco..
3. IoT companies and manufacturing organizations.