Using an unlevered Free Cash Flow to Firm (FCFF) model, we project ON Semiconductor Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.8% to -2.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 48, DPO 59, DIO 166). At a 8.8% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 30.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $137.01 per share, suggesting ON is undervalued by 122.7% at the current price of $61.51.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,535 | 1,692 | 1,866 | 1,813 | 1,760 | 1,804 |
| (−) Net Interest | 76 | 84 | 92 | 90 | 87 | 89 |
| (+) D&A | 820 | 857 | 800 | 656 | 677 | 694 |
| EBITDA | 2,431 | 2,633 | 2,758 | 2,559 | 2,525 | 2,588 |
| (−) Tax | 203 | 223 | 247 | 239 | 233 | — |
| (−) CapEx | 677 | 746 | 823 | 800 | 776 | — |
| (−) ΔWC | -493 | 192 | 214 | -66 | -64 | — |
| Free Cash Flow (FCF) | 2,044 | 1,471 | 1,474 | 1,586 | 1,580 | — |
| Peers' EBITDA Multiple | 30.1x | |||||
| Terminal Value | 77,771 | |||||
| WACC / Discount Rate | 8.79% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,960 | 1,297 | 1,194 | 1,181 | 1,081 | 51,030 |
| Enterprise Value | 57,742 | |||||
| Projection Period | 6,713 | 11.6% | ||||
| Terminal Value | 51,030 | 88.4% | ||||
| (−) Current Net Debt | 1,320 | |||||
| Equity Value | 56,422 | |||||
| (÷) Outstanding Shares | 412M | |||||
| Fair Price | $137 | +122.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 26.0x | 28.0x | 30.0x | 32.0x | 34.0x |
|---|---|---|---|---|---|
| 6.8% | $132 | $141 | $150 | $159 | $168 |
| 7.8% | $126 | $135 | $143 | $152 | $160 |
| 8.8% | $121 | $129 | $137 | $145 | $154 |
| 9.8% | $115 | $123 | $131 | $139 | $147 |
| 10.8% | $111 | $118 | $126 | $133 | $141 |
Current price: $61.51. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.