ON Semiconductor (ON) makes power and sensing chips for cars, industrial equipment and AI data centers. The stock trades at about 27.6 times trailing adjusted earnings, meaning normalized net income with stock-based compensation added back. That basis is meant to sit closer to the one analysts use in their forecasts than GAAP earnings would, though the two are not defined identically. At that multiple the stock looks expensive. But the trailing year was weak, and the weakness is fading.

Why ON Looks Expensive On A Year Of Shrinking Sales

Over the trailing twelve months, revenue of $6.2 billion fell 3.1%. Part of that fall was chosen. The company has exited about $900 million of annual non-core revenue over the last…