Onsemi Just Grew Auto Sales by 35%. Is the Stock a Buy?
Despite what was anticipated to be a tough second-quarter 2023, Onsemi (NASDAQ: ON) sailed through all expectations in its last quarter. Revenue increased less than 1%, so it appeared to be a lackluster performance. But under the surface, this chipmaker is emerging as an important player in the global automotive industry. Sales to automakers jumped 35% year over year in the last quarter, driven especially by demand for electric vehicle (EV) semiconductors.
Onsemi stock has been off to the races in 2023, but is the stock still a buy?
First, about the year-over-year flat revenue, which clocked in at $2.09 billion for Q2. A couple of years ago, CEO Hassane El-Khoury and CFO Thad Trent were brought in to refocus Onsemi not just on growth, but profitable growth. That has meant exiting non-core and lower-margin chip manufacturing. El-Khoury explained on the earnings call that another $57 million in business was sunsetted in Q2, bringing the total value of business closeouts to $100 million for 2023 and $400 million since the business transformation began in 2021.
Source Fool.com
