NYSE:STM: good value for what you're paying.

Last update: Jan 29, 2024

Consider STMICROELECTRONICS NV-NY SHS (NYSE:STM) as a top value stock, identified by our stock screening tool. NYSE:STM shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Evaluating Valuation: NYSE:STM

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:

A Price/Earnings ratio of 9.62 indicates a reasonable valuation of STM.
Based on the Price/Earnings ratio, STM is valued cheaper than 96.19% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.02. STM is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 11.12, the valuation of STM can be described as reasonable.
STM's Price/Forward Earnings ratio is rather cheap when compared to the industry. STM is cheaper than 95.24% of the companies in the same industry.
STM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
STM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. STM is cheaper than 95.24% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, STM is valued a bit cheaper than the industry average as 78.10% of the companies are valued more expensively.
STM has an outstanding profitability rating, which may justify a higher PE ratio.

A Closer Look at Profitability for NYSE:STM

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 8 for profitability:

STM has a better Return On Assets (17.88%) than 84.76% of its industry peers.
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.
With an excellent Return On Invested Capital value of 25.26%, STM belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for STM is significantly above the industry average of 12.24%.
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.
STM has a better Operating Margin (30.01%) than 87.62% of its industry peers.
STM's Operating Margin has improved in the last couple of years.
STM's Gross Margin has improved in the last couple of years.

Assessing Health for NYSE:STM

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:STM was assigned a score of 6 for health:

An Altman-Z score of 5.41 indicates that STM is not in any danger for bankruptcy at the moment.
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 better Debt to FCF ratio (1.50) than 71.43% 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.
A Current Ratio of 2.15 indicates that STM has no problem at all paying its short term obligations.

A Closer Look at Growth for NYSE:STM

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:STM has achieved 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.
STM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.84% yearly.
Looking at the last year, STM shows a very strong growth in Revenue. The Revenue has grown by 22.51%.
STM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.08% yearly.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.