Analyzing STM Stock Performance – A Comprehensive Overview

Now trading at a price of $40.78, STMicroelectronics has moved 1.2% so far today.

STMicroelectronics returned losses of -10.3% last year, with its stock price reaching a high of $55.85 and a low of $37.21. Over the same period, the stock underperformed the S&P 500 index by -35.1%. AThe company's 50-day average price was $41.54. 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. Based in Geneva, Switzerland, the Large-Cap Technology company has 51,323 full time employees. STMicroelectronics has offered a 0.9% dividend yield over the last 12 months.

Exceptional EPS Growth but Slimmer Gross Margins than the Industry Average of 54.23%:

2018 2019 2020 2021 2022 2023
Revenue (M) $9,664 $9,556 $10,219 $12,761 $16,128 $17,286
Gross Margins 40% 39% 37% 42% 47% 48%
Net Margins 13% 11% 11% 16% 25% 24%
Net Income (M) $1,287 $1,032 $1,106 $2,000 $3,960 $4,211
Net Interest Expense (M) -$7 $1 -$20 -$29 $58 $171
Depreciation & Amort. (M) $791 $854 $923 $1,045 $1,216 $1,561
Diluted Shares (M) 911 904 920 925 946 944
Earnings Per Share $1.41 $1.14 $1.2 $2.16 $4.19 $4.46
EPS Growth n/a -19.15% 5.26% 80.0% 93.98% 6.44%
Free Cash Flow (M) $1,845 $1,869 $2,093 $3,060 $5,202 $5,992
Total Debt (M) $2,056 $2,245 $3,416 $2,682 $2,892 $3,144
Net Debt / EBITDA -0.1 -0.17 0.18 -0.16 -0.06 -0.01
Current Ratio 2.76 3.03 2.49 2.65 2.56 3.17

STMicroelectronics has exceptional EPS growth and generally positive cash flows. Additionally, the company's financial statements display an excellent current ratio of 3.17 and healthy leverage levels. However, the firm has slimmer gross margins than its peers.

The Market May Be Undervaluing STMicroelectronics's Assets and Equity:

STMicroelectronics has a trailing twelve month P/E ratio of 10.7, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $2.97, the company has a forward P/E ratio of 14.0. The 11.2% compound average growth rate of STMicroelectronics's historical and projected earnings per share yields a PEG ratio of 0.95. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing STMicroelectronics in terms of its equity because its P/B ratio is 2.15 whereas the sector average is 7.92. The company's shares are currently trading -3.3% below their Graham number.

STMicroelectronics Has an Analyst Consensus of Some Upside Potential:

The 10 analysts following STMicroelectronics have set target prices ranging from $35.0 to $60.0 per share, for an average of $49.7 with a buy rating. The company is trading -17.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.

The largest shareholder is Van Eck Associates Corporation, whose 1% stake in the company is worth $236,590,154.

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.