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

STMICROELECTRONICS NV-NY SHS (NYSE:STM) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:STM showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Valuation Analysis for 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:

• STM is valuated reasonably with a Price/Earnings ratio of 11.37.
• Based on the Price/Earnings ratio, STM is valued cheaply inside the industry as 95.37% of the companies are valued more expensively.
• STM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.19.
• Based on the Price/Forward Earnings ratio, STM is valued cheaply inside the industry as 90.74% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Forward Earnings ratio of 19.98, STM is valued a bit cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STM indicates a rather cheap valuation: STM is cheaper than 95.37% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, STM is valued cheaper than 84.26% of the companies in the same industry.
• The excellent profitability rating of STM may justify a higher PE ratio.

Understanding NYSE:STM'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:STM has achieved a 9:

• STM has a better Return On Assets (17.88%) than 91.67% of its industry peers.
• STM has a better Return On Equity (27.47%) than 87.96% of its industry peers.
• The Return On Invested Capital of STM (25.82%) is better than 95.37% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for STM is significantly above the industry average of 10.85%.
• The last Return On Invested Capital (25.82%) for STM is above the 3 year average (20.86%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 23.70%, STM belongs to the best of the industry, outperforming 82.41% of the companies in the same industry.
• In the last couple of years the Profit Margin of STM has grown nicely.
• STM's Operating Margin of 30.01% is amongst the best of the industry. STM outperforms 89.81% of its industry peers.
• In the last couple of years the Operating Margin of STM has grown nicely.
• Looking at the Gross Margin, with a value of 47.47%, STM is in the better half of the industry, outperforming 60.19% of the companies in the same industry.
• In the last couple of years the Gross Margin of STM has grown nicely.

Health Analysis for NYSE:STM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:STM has received a 6 out of 10:

• STM has an Altman-Z score of 5.42. This indicates that STM is financially healthy and has little risk of 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.
• With a decent Debt to FCF ratio value of 1.50, STM is doing good in the industry, outperforming 69.44% 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.

Growth Assessment of NYSE:STM

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:STM has earned a 4 for growth:

• Measured over the past years, STM shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.72% on average per year.
• The Revenue has been growing by 12.33% on average over the past years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Keep in mind

This article should in no way be interpreted as advice. 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.