In the rapidly evolving landscape of technology, two companies stand out for their innovative approaches: ON Semiconductor Corporation and Ouster, Inc. While both operate within the technology sector, ON focuses on semiconductor solutions that power a range of industries, including automotive, while Ouster specializes in high-resolution lidar sensors designed for advanced 3D vision applications. This article will explore the strengths and strategies of each company to help you determine which might be the more compelling investment opportunity.
Table of contents
Company Overview
ON Semiconductor Corporation Overview
ON Semiconductor Corporation, headquartered in Phoenix, Arizona, is a leading provider of intelligent sensing and power solutions globally. The company’s mission is to drive the electrification of the automotive industry, enabling the development of lighter, longer-range electric vehicles and fast-charging systems. ON Semiconductor operates through three main segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. They offer a diverse portfolio of semiconductor products that cater to various applications, including power switching, signal amplification, and voltage regulation. With a robust workforce of approximately 26,400 employees, ON is well-positioned to capitalize on the growing demand for sustainable energy and advanced automotive technologies.
Ouster, Inc. Overview
Ouster, Inc., based in San Francisco, California, specializes in designing and manufacturing high-resolution digital lidar sensors that provide 3D vision for machinery, vehicles, and robotics. Their mission is to make advanced sensing technology accessible and affordable across multiple industries. Ouster’s product lineup includes both scanning sensors and true solid-state flash sensors, catering to an array of applications, from autonomous vehicles to industrial automation. With approximately 292 employees, Ouster is positioned as a pioneer in the lidar sector, focusing on innovative solutions that enhance perception capabilities in various environments.
Key similarities between ON Semiconductor and Ouster, Inc. include their focus on advanced technology and the semiconductor industry. However, they diverge significantly in their product offerings; ON specializes in a wide range of semiconductor solutions for power and sensing applications, while Ouster is concentrated on high-resolution lidar sensors for 3D imaging.
Income Statement Comparison
The following table summarizes the most recent income statements for ON Semiconductor Corporation and Ouster, Inc., highlighting key financial metrics.
| Metric | ON Semiconductor | Ouster, Inc. |
|---|---|---|
| Revenue | 7.08B | 111.10M |
| EBITDA | 2.54B | -79.95M |
| EBIT | 1.90B | -94.69M |
| Net Income | 1.57B | -97.05M |
| EPS | 3.68 | -2.08 |
Interpretation of Income Statement
In the latest fiscal year, ON Semiconductor experienced a decline in revenue, down from 8.25B to 7.08B, reflecting a challenging market environment. However, it maintained a robust net income of 1.57B, albeit lower than the previous year’s 2.18B, indicating a decrease in profitability but still demonstrating strong operational efficiency with EBITDA staying positive. Conversely, Ouster, Inc. continues to struggle, reporting negative margins and increasing losses, with significant operational expenses impacting its bottom line. This contrast underscores the importance of evaluating both revenue trends and profitability metrics when assessing investment opportunities.
Financial Ratios Comparison
Below is a comparative table highlighting the most recent financial ratios for ON Semiconductor Corporation (ON) and Ouster, Inc. (OUST).
| Metric | ON | OUST |
|---|---|---|
| ROE | 17.88% | -53.64% |
| ROIC | 11.88% | -51.12% |
| P/E | 17.13 | -5.87 |
| P/B | 3.06 | 1.58 |
| Current Ratio | 5.06 | 2.80 |
| Quick Ratio | 3.38 | 2.59 |
| D/E | 0.38 | 0.11 |
| Debt-to-Assets | 0.24 | 0.21 |
| Interest Coverage | 28.37 | -57.15 |
| Asset Turnover | 0.50 | 0.40 |
| Fixed Asset Turnover | 1.61 | 4.54 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
The financial ratios of ON indicate a solid performance, with positive ROE, ROIC, and a healthy interest coverage ratio, suggesting efficient capital use and strong profitability. In contrast, OUST’s negative ratios raise concerns about its financial health and operational efficiency, particularly its extreme negative P/E and interest coverage ratios, which highlight significant challenges ahead. Investors should be cautious when considering OUST for their portfolios.
Dividend and Shareholder Returns
ON Semiconductor Corporation (ON) does not currently pay dividends, as evidenced by a dividend payout ratio of 0. Instead, the company focuses on reinvesting its earnings for growth and innovation, which aligns with long-term shareholder value creation. Additionally, ON has engaged in share buyback programs, which can enhance shareholder returns by reducing the number of outstanding shares. Conversely, Ouster, Inc. (OUST) also refrains from paying dividends, reflecting its ongoing high-growth phase and significant capital expenditures. This strategy suggests a prioritization of reinvestment over immediate returns, but it raises concerns about its ability to generate sustainable long-term value for shareholders.
Strategic Positioning
ON Semiconductor Corporation (ON) holds a significant market share in the semiconductor industry, particularly with its advanced power solutions and intelligent sensing technologies. In contrast, Ouster, Inc. (OUST) occupies a niche within the hardware sector, focusing on high-resolution lidar sensors. While ON benefits from its diversified product offerings, OUST faces competitive pressure from emerging lidar technologies and established players. Both companies must navigate technological disruptions while leveraging their strengths to maintain their market positions.
Stock Comparison
In this analysis, I will review the recent stock price movements and trading dynamics of ON Semiconductor Corporation (ON) and Ouster, Inc. (OUST) over the past year, highlighting key trends and performance metrics.
Trend Analysis
ON Semiconductor Corporation (ON) Over the past year, ON’s stock has experienced a significant decline, with a percentage change of -34.51%. This indicates a bearish trend, characterized by acceleration in the downward movement. The stock reached a notable high of 81.14 and a low of 33.7, suggesting considerable volatility, as evidenced by a standard deviation of 12.59. In the recent analysis period from September 14, 2025, to November 30, 2025, ON’s stock saw a slight recovery with a price change of 2.72%, although this remains within the neutral trend classification due to the overall negative performance.
Ouster, Inc. (OUST) In contrast, OUST has shown remarkable growth over the past year, with a percentage change of +216.45%, marking a bullish trend despite a recent downturn. The stock has peaked at 35.8 and dipped to a low of 4.82, indicating some volatility with a standard deviation of 8.42. However, in the latest trend period from September 14, 2025, to November 30, 2025, OUST’s stock experienced a decrease of 23.59%, which reflects a deceleration in momentum, although the overall bullish sentiment remains intact.
Analyst Opinions
Recent analyst recommendations indicate a mixed outlook for the two companies. ON Semiconductor Corporation (ON) received a “Buy” rating from analysts, reflecting strong performance in return on equity and assets, suggesting solid growth potential. In contrast, Ouster, Inc. (OUST) is rated “C-“, with analysts expressing concerns about its financial metrics, particularly in discounted cash flow and returns. As of now, the consensus for ON is a “Buy,” while OUST leans toward a “Sell.” I recommend carefully considering these insights before making investment decisions.
Stock Grades
I found reliable stock grades for two companies: ON Semiconductor Corporation and Ouster, Inc. Here’s a summary of their current ratings.
ON Semiconductor Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | maintain | Equal Weight | 2025-11-24 |
| TD Cowen | maintain | Buy | 2025-11-04 |
| Truist Securities | maintain | Hold | 2025-11-04 |
| Baird | maintain | Neutral | 2025-11-04 |
| Rosenblatt | maintain | Neutral | 2025-11-04 |
| Morgan Stanley | maintain | Equal Weight | 2025-11-04 |
| UBS | maintain | Neutral | 2025-10-27 |
| B of A Securities | maintain | Neutral | 2025-09-05 |
| Citigroup | maintain | Neutral | 2025-08-05 |
| JP Morgan | maintain | Neutral | 2025-08-05 |
Ouster, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Cantor Fitzgerald | upgrade | Overweight | 2025-11-07 |
| Cantor Fitzgerald | upgrade | Overweight | 2025-11-06 |
| WestPark Capital | maintain | Buy | 2025-11-05 |
| Rosenblatt | maintain | Buy | 2025-11-05 |
| WestPark Capital | upgrade | Buy | 2025-08-13 |
| Oppenheimer | maintain | Outperform | 2025-07-16 |
| WestPark Capital | downgrade | Hold | 2025-06-12 |
| WestPark Capital | upgrade | Buy | 2025-05-09 |
| Cantor Fitzgerald | maintain | Overweight | 2025-03-21 |
| WestPark Capital | maintain | Hold | 2025-03-21 |
Overall, ON Semiconductor Corporation maintains a stable outlook with most grades remaining neutral or equal weight, while Ouster, Inc. shows a positive trend with recent upgrades, indicating increasing investor confidence.
Target Prices
The consensus target prices for ON Semiconductor Corporation (ON) and Ouster, Inc. (OUST) reflect optimistic expectations from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| ON Semiconductor Corporation | 64 | 51 | 58.33 |
| Ouster, Inc. | 39 | 33 | 36.67 |
For ON, the consensus target price of 58.33 suggests a potential upside from the current price of 49.54. Meanwhile, OUST’s target consensus of 36.67 indicates significant growth potential from its current price of 22.11.
Strengths and Weaknesses
The following table compares the strengths and weaknesses of ON Semiconductor Corporation and Ouster, Inc.
| Criterion | ON Semiconductor Corporation | Ouster, Inc. |
|---|---|---|
| Diversification | Strong product line across sectors | Limited product range focused on lidar technology |
| Profitability | High net profit margin (22.2%) | Negative profit margins, struggling financially |
| Innovation | Continuous investment in R&D | Innovative lidar technology but low market adoption |
| Global presence | Extensive global operations | Limited global reach |
| Market Share | Significant share in semiconductors | Small market share in lidar segment |
| Debt level | Moderate debt levels (debt/equity ratio: 0.38) | Low debt levels (debt/equity ratio: 0.11) |
Key takeaways: ON Semiconductor shows solid profitability and market share, while Ouster struggles with profitability and market presence. Diversification is a strength for ON, whereas Ouster’s innovation may not yet be widely adopted.
Risk Analysis
In the following table, I outline the key risks associated with ON Semiconductor Corporation and Ouster, Inc.
| Metric | ON Semiconductor Corporation | Ouster, Inc. |
|---|---|---|
| Market Risk | High | Very High |
| Regulatory Risk | Moderate | High |
| Operational Risk | Moderate | Very High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
Both companies face significant market and operational risks. Ouster, with a high beta of 2.964, indicates higher volatility compared to ON’s beta of 1.571, suggesting more pronounced market risk. Recent operational challenges have compounded risks for Ouster, making it essential for investors to exercise caution.
Which one to choose?
In evaluating ON Semiconductor Corporation (ON) and Ouster, Inc. (OUST), ON presents a more favorable investment profile. ON has consistently demonstrated strong profitability with a net profit margin of 22.2% and a current ratio of 5.06, indicating solid liquidity. Analyst ratings for ON are generally positive, with a score of B, while OUST has a lower rating of C-. OUST struggles with profitability, reflected in its negative margins and high debt levels. Although OUST has shown a remarkable price increase of 216.45% recently, its overall trend remains bearish, and the company faces significant operational challenges.
Investors focused on stability and growth may prefer ON, while those willing to take on higher risk for potential rewards might consider OUST. However, caution is warranted due to OUST’s persistent operational issues and market volatility.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of ON Semiconductor Corporation and Ouster, Inc. to enhance your investment decisions:
