In a market where value is scarce, NYSE:STM offers a refreshing opportunity with its solid fundamentals.

Last update: Dec 5, 2023

Take a closer look at STMICROELECTRONICS NV-NY SHS (NYSE:STM), a remarkable value stock uncovered by our stock screener. NYSE:STM excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

ChartMill's Evaluation of Valuation

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:STM scores a 7 out of 10:

The Price/Earnings ratio is 10.24, which indicates a very decent valuation of STM.
95.19% of the companies in the same industry are more expensive than STM, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.02, STM is valued rather cheaply.
A Price/Forward Earnings ratio of 10.85 indicates a reasonable valuation of STM.
Based on the Price/Forward Earnings ratio, STM is valued cheaper than 92.31% of the companies in the same industry.
STM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.08, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STM indicates a rather cheap valuation: STM is cheaper than 94.23% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STM indicates a somewhat cheap valuation: STM is cheaper than 73.08% of the companies listed in the same industry.
STM has an outstanding profitability rating, which may justify a higher PE ratio.

Evaluating Profitability: NYSE:STM

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:STM scores a 9 out of 10:

Looking at the Return On Assets, with a value of 17.88%, STM belongs to the top of the industry, outperforming 85.58% of the companies in the same industry.
STM has a better Return On Equity (27.47%) than 83.65% of its industry peers.
STM's Return On Invested Capital of 25.26% is amongst the best of the industry. STM outperforms 93.27% of its industry peers.
STM had an Average Return On Invested Capital over the past 3 years of 17.26%. This is significantly above the industry average of 12.23%.
The 3 year average ROIC (17.26%) for STM is below the current ROIC(25.26%), indicating increased profibility in the last year.
With a decent Profit Margin value of 23.70%, STM is doing good in the industry, outperforming 78.85% of the companies in the same industry.
STM's Profit Margin has improved in the last couple of years.
The Operating Margin of STM (30.01%) is better than 87.50% of its industry peers.
STM's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of STM has grown nicely.

Assessing Health for NYSE:STM

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:STM, the assigned 7 reflects its health status:

An Altman-Z score of 5.61 indicates that STM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.61, STM is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
The Debt to FCF ratio of STM is 1.50, which is an excellent value as it means it would take STM, only 1.50 years of fcf income to pay off all of its debts.
STM has a Debt to FCF ratio of 1.50. This is in the better half of the industry: STM outperforms 71.15% of its industry peers.
STM has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
STM has a Current Ratio of 2.15. This indicates that STM is financially healthy and has no problem in meeting its short term obligations.
The current and quick ratio evaluation for STM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Assessing Growth for NYSE:STM

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:STM has received a 6 out of 10:

The Earnings Per Share has grown by an impressive 52.63% over the past year.
STM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.84% yearly.
The Revenue has grown by 22.51% in the past year. This is a very strong growth!
Measured over the past years, STM shows a quite strong growth in Revenue. The Revenue has been growing by 14.08% on average per year.

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 STM

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.