Is ON Semiconductor Corp. overvalued or undervalued?

As of 4 August 2025, the valuation grade for ON Semiconductor Corp. has moved from fair to expensive, indicating a shift in its market perception. The company appears overvalued based on its current metrics, including a P/E ratio of 23, an EV to EBIT of 22.12, and a Price to Book Value of 3.67. In comparison, its peer Microchip Technology, Inc. has a significantly higher P/E ratio of 25.65, while also showing a much higher EV to EBITDA of 43.39, highlighting that ON Semiconductor's valuation is not justified relative to its peers.
Despite a strong historical performance with a 5-year return of 141.97%, the company's year-to-date return of -17.80% and a 1-year return of -26.63% starkly contrast with the S&P 500's returns of 12.22% and 17.14%, respectively. This divergence reinforces the notion that ON Semiconductor is currently overvalued in the market.