STM

STMicroelectronics Stock in Brief

Now trading at a price of $50.21, STMicroelectronics has moved -1.1% so far today.

STMicroelectronics shares moved 36.8% over the last 52 weeks, with a high of $53.53 and a low of $28.35. During this time, the stock outperformed the S&P 500 index by 43.0%. As of January 2022, the company's 50-day average price is $49.0. STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The large-cap Technology company has 51,370 full time employees and is based in Geneva, Switzerland. STMicroelectronics has returned a 0.5% dividend yield over the last 12 months.

Exceptional EPS Growth with Low Leverage Levels:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $9,556 $10,219 $12,761 $16,128
Revenue Growth n/a 6.94% 24.88% 26.39%
Gross Margins 38.7% 33.3% 39.6% 45.5%
Gross Margins Growth n/a -13.95% 18.92% 14.9%
Operating Margins 11.6% 12.1% 19.6% 28.3%
Operating Margins Growth n/a 4.31% 61.98% 44.39%
Net Margins 10.8% 6.79% 13.41% 26.8%
Net Margins Growth n/a -37.13% 97.5% 99.85%
Earnings Per Share $1.14 $1.2 $2.16 $4.19
EPS Growth n/a 5.26% 80.0% 93.98%
Diluted Shares (MM) 904 920 925 902
Free Cash Flow (MM) $646 $804 $1,188 $1,601
FCF Growth n/a 24.46% 47.76% 34.76%
Capital Expenditures (MM) -$1,222 -$1,654 -$2,274 -$3,978
Net Debt / EBITDA -0.47 -0.16 -0.18 -0.11

STMicroelectronics Is Currently Under Priced:

Compared to the Technology sector's average of 27.16, STMicroelectronics has a trailing twelve month P/E ratio of 12.0 and, according to its EPS guidance of 4.39, an expected P/E ratio of 11.4. STMicroelectronics's PEG ratio is 0.29 based on its 40.1% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 17.2%, because the growth rate implied by STMicroelectronics's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.68, which still suggests that company's shares are possibly undervalued.

Furthermore, STMicroelectronics is likely undervalued in terms of its equity because its P/B ratio is 3.4 compared to its sector average of 6.23. The company's shares are currently trading 86.3% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.17 * 14.869) = $26.94

Most of the Market Indicators on STMicroelectronics Are Negative:

8 analysts are following STMicroelectronics and have set target prices ranging from $36.0 to $78.0 per share. On average, they have given the company a rating of buy. At the current price of $50.21, STM is trading -14.9% away from its average analyst target price of $59.0 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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