NYSE:STM is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Jan 8, 2024

Uncover the potential of STMICROELECTRONICS NV-NY SHS (NYSE:STM) as our stock screener's choice for an undervalued stock. NYSE:STM maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

A Closer Look at Valuation for NYSE:STM

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:STM has achieved a 7 out of 10:

The Price/Earnings ratio is 9.61, which indicates a very decent valuation of STM.
STM's Price/Earnings ratio is rather cheap when compared to the industry. STM is cheaper than 96.19% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.56. STM is valued rather cheaply when compared to this.
STM is valuated reasonably with a Price/Forward Earnings ratio of 10.82.
Based on the Price/Forward Earnings ratio, STM is valued cheaper than 97.14% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.55, STM is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, STM is valued cheaply inside the industry as 95.24% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, STM is valued a bit cheaper than 76.19% of the companies in the same industry.
STM has an outstanding profitability rating, which may justify a higher PE ratio.

Understanding NYSE:STM's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:STM was assigned a score of 9 for profitability:

With an excellent Return On Assets value of 17.88%, STM belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 27.47%, STM belongs to the top of the industry, outperforming 83.81% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 25.26%, STM belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for STM is significantly above the industry average of 12.09%.
The last Return On Invested Capital (25.26%) for STM is above the 3 year average (17.26%), which is a sign of increasing profitability.
STM's Profit Margin of 23.70% is fine compared to the rest of the industry. STM outperforms 79.05% of its industry peers.
In the last couple of years the Profit Margin of STM has grown nicely.
Looking at the Operating Margin, with a value of 30.01%, STM belongs to the top of the industry, outperforming 87.62% of the companies in the same industry.
In the last couple of years the Operating Margin of STM has grown nicely.
STM's Gross Margin has improved in the last couple of years.

Assessing Health Metrics for NYSE:STM

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:STM scores a 7 out of 10:

An Altman-Z score of 5.41 indicates that STM is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 5.41, STM is doing good in the industry, outperforming 61.90% 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.
With a decent Debt to FCF ratio value of 1.50, STM is doing good in the industry, outperforming 71.43% of the companies in the same industry.
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.
STM does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Deciphering NYSE:STM's Growth Rating

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:STM boasts a 6 out of 10:

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

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

Check the latest full fundamental report of STM for a complete fundamental analysis.

Keep in mind

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.