When you look at NYSE:ST, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Sep 26, 2023

Discover SENSATA TECHNOLOGIES HOLDING (NYSE:ST), an undervalued stock highlighted by our stock screener. NYSE:ST showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

How We Gauge Valuation for NYSE:ST

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:ST scores a 9 out of 10:

The Price/Earnings ratio is 9.88, which indicates a very decent valuation of ST.
Based on the Price/Earnings ratio, ST is valued cheaply inside the industry as 93.02% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.92, ST is valued rather cheaply.
ST is valuated reasonably with a Price/Forward Earnings ratio of 8.49.
ST's Price/Forward Earnings ratio is rather cheap when compared to the industry. ST is cheaper than 97.67% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ST to the average of the S&P500 Index (19.00), we can say ST is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ST is valued cheaper than 89.53% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ST indicates a rather cheap valuation: ST is cheaper than 87.21% of the companies listed 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.
ST has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ST's earnings are expected to grow with 13.23% in the coming years.

Exploring NYSE:ST's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:ST has achieved a 7:

ST has a better Return On Assets (4.63%) than 76.74% of its industry peers.
ST has a Return On Equity of 12.12%. This is amongst the best in the industry. ST outperforms 80.23% of its industry peers.
ST's Return On Invested Capital of 6.70% is fine compared to the rest of the industry. ST outperforms 74.42% of its industry peers.
The 3 year average ROIC (6.26%) for ST is below the current ROIC(6.70%), indicating increased profibility in the last year.
ST has a Profit Margin of 9.50%. This is amongst the best in the industry. ST outperforms 84.88% of its industry peers.
ST has a better Operating Margin (14.81%) than 83.72% of its industry peers.
ST has a Gross Margin of 32.30%. This is in the better half of the industry: ST outperforms 76.74% of its industry peers.

Understanding NYSE:ST's Health Score

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:ST has earned a 6 out of 10:

ST's Debt to FCF ratio of 10.23 is fine compared to the rest of the industry. ST outperforms 76.74% of its industry peers.
ST has a Current Ratio of 2.81. This indicates that ST is financially healthy and has no problem in meeting its short term obligations.
ST's Current ratio of 2.81 is fine compared to the rest of the industry. ST outperforms 72.09% of its industry peers.
ST has a Quick Ratio of 2.06. This indicates that ST is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.06, ST is in the better half of the industry, outperforming 72.09% of the companies in the same industry.

Analyzing Growth Metrics

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:ST has received a 5 out of 10:

The Earnings Per Share has grown by an nice 10.45% over the past year.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of ST

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.