What’s Next For ON Semiconductor Stock After 10% Rise In The Past Week?

by Trefis Team
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ON Semiconductor stock (NASDAQ: ON) has seen a sharp rise of almost 10% over the past week and currently trades at $49 per share. The stock rally was driven by strong Q2 2021 earnings reported a month ago, that have driven expectations of further revenue and margin growth. The stock has rallied nearly 15% over the past month, after the company posted Q2 ’21 revenues at $1.67 billion, up from $1.21 billion in Q2 ’20. With COGS and operating expenses in check, the company saw operating income jump 6.5x over this period, from $43 million to $282 million. Despite a rise in other expenses and a higher effective tax rate, EPS jumped from $0.00 in Q2 2020 to $0.43 in Q2 2021.

Now, after the recent rally, will ON stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for ON Semiconductor stock average close to 3.9% in the next one-month (21 trading days) period after experiencing a 9.7% rise over the previous one week (five trading days) period. But how would these numbers change if you are interested in holding ON stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test ON Semiconductor stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF ON stock moved by -5% over five trading days, THEN over the next 21 trading days, ON stock moves an average of 4.4 percent, with a decent 65.1% probability of a positive return.

Some Fun Scenarios, FAQs & Making Sense of ON Stock Movements:

Question 1: Is the average return for ON stock higher after a drop?


Consider two situations,

Case 1: ON stock drops by -5% or more in a week

Case 2: ON stock rises by 5% or more in a week

Is the average return for ON stock higher over the subsequent month after Case 1 or Case 2?

ON stock fares better after Case 1, with an average return of 4.4% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.8% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how ON stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?


If you buy and hold ON stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For ON stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?


The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

ON’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for ON Semiconductor stock by changing the inputs in the charts above.


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