Despite its impressive fundamentals, NYSE:ST remains undervalued.

Last update: Sep 22, 2023

SENSATA TECHNOLOGIES HOLDING (NYSE:ST) was identified as a decent value stock by our stock screener. NYSE:ST scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Understanding NYSE:ST's Valuation Score

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:ST, the assigned 9 reflects its valuation:

ST is valuated reasonably with a Price/Earnings ratio of 9.92.
Compared to the rest of the industry, the Price/Earnings ratio of ST indicates a rather cheap valuation: ST is cheaper than 92.77% of the companies listed in the same industry.
ST's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.93.
A Price/Forward Earnings ratio of 8.53 indicates a reasonable valuation of ST.
96.39% of the companies in the same industry are more expensive than ST, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 19.01. ST is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, ST is valued cheaply inside the industry as 89.16% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ST is valued cheaper than 86.75% of the companies in the same industry.
ST's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ST may justify a higher PE ratio.
ST's earnings are expected to grow with 13.23% in the coming years. This may justify a more expensive valuation.

Exploring NYSE:ST's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ST scores a 6 out of 10:

ST's Return On Assets of 4.63% is fine compared to the rest of the industry. ST outperforms 74.70% of its industry peers.
With a decent Return On Equity value of 12.12%, ST is doing good in the industry, outperforming 79.52% of the companies in the same industry.
ST has a Return On Invested Capital of 6.70%. This is in the better half of the industry: ST outperforms 73.49% of its industry peers.
The last Return On Invested Capital (6.70%) for ST is above the 3 year average (6.26%), which is a sign of increasing profitability.
The Profit Margin of ST (9.50%) is better than 84.34% of its industry peers.
ST's Operating Margin of 14.81% is amongst the best of the industry. ST outperforms 83.13% of its industry peers.
The Gross Margin of ST (32.30%) is better than 75.90% of its industry peers.

Evaluating Health: NYSE:ST

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:ST was assigned a score of 6 for health:

ST's Debt to FCF ratio of 10.23 is fine compared to the rest of the industry. ST outperforms 75.90% of its industry peers.
A Current Ratio of 2.81 indicates that ST has no problem at all paying its short term obligations.
ST has a Current ratio of 2.81. This is in the better half of the industry: ST outperforms 71.08% of its industry peers.
A Quick Ratio of 2.06 indicates that ST has no problem at all paying its short term obligations.
The Quick ratio of ST (2.06) is better than 71.08% of its industry peers.

Assessing Growth Metrics for NYSE:ST

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:ST was assigned a score of 5 for growth:

ST shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.45%, which is quite good.
Based on estimates for the next years, ST will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.88% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of ST contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.