ON PEG Ratio Analysis

The PEG ratio divides a stock's price-to-earnings ratio by its expected earnings growth rate, so a PEG of 1.80x means investors are paying $1.80 for each unit of expected earnings growth — above what is typically considered fair value.

This sits well above the sector median of 0.80x, placing ON in the 70th percentile among sector peers, meaning it is more expensive on a growth-adjusted basis than 70% of them. The trend data is limited: the year-over-year change is N/A, while the quarter-over-quarter change shows a rise of 150.0%, from 0.72x to 1.80x. That sharp increase indicates the market has either priced in slower growth expectations or pushed the valuation higher within a short window. Given both the elevated level and the sudden jump, the stock now carries greater valuation risk relative to its growth prospects. This directly supports the overall CAUTIOUS verdict, as the PEG ratio signals deteriorating value versus peers rather than a margin of safety.

Frequently Asked Questions