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

Last update: Jul 2, 2024

Discover STMICROELECTRONICS NV-NY SHS (NYSE:STM), an undervalued stock highlighted by our stock screener. NYSE:STM showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Assessing Valuation Metrics for NYSE:STM

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:STM boasts a 7 out of 10:

Based on the Price/Earnings ratio of 10.06, the valuation of STM can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of STM indicates a rather cheap valuation: STM is cheaper than 97.20% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.16. STM is valued rather cheaply when compared to this.
STM is valuated reasonably with a Price/Forward Earnings ratio of 11.87.
Based on the Price/Forward Earnings ratio, STM is valued cheaply inside the industry as 92.52% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.02. STM is valued slightly cheaper when compared to this.
Based on the Enterprise Value to EBITDA ratio, STM is valued cheaper than 97.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, STM is valued cheaply inside the industry as 85.98% of the companies are valued more expensively.
The excellent profitability rating of STM 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:

The Return On Assets of STM (17.88%) is better than 92.52% of its industry peers.
With an excellent Return On Equity value of 27.47%, STM belongs to the best of the industry, outperforming 87.85% of the companies in the same industry.
STM's Return On Invested Capital of 25.82% is amongst the best of the industry. STM outperforms 95.33% of its industry peers.
STM had an Average Return On Invested Capital over the past 3 years of 20.86%. This is significantly above the industry average of 10.82%.
The 3 year average ROIC (20.86%) for STM is below the current ROIC(25.82%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 23.70%, STM belongs to the top of the industry, outperforming 82.24% of the companies in the same industry.
In the last couple of years the Profit Margin of STM has grown nicely.
STM has a better Operating Margin (30.01%) than 89.72% 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 Metrics for NYSE:STM

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:STM, the assigned 6 for health provides valuable insights:

STM has an Altman-Z score of 5.02. 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.
STM has a better Debt to FCF ratio (1.50) than 70.09% of its industry peers.
A Debt/Equity ratio of 0.11 indicates that STM is not too dependend on debt financing.
A Current Ratio of 2.15 indicates that STM has no problem at all paying its short term obligations.

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 4 out of 10:

The Earnings Per Share has been growing by 25.72% on average over the past years. This is a very strong growth
The Revenue has been growing by 12.33% on average over the past years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

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.