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

Last update: Aug 16, 2024

Our stock screening tool has pinpointed STMICROELECTRONICS NV-NY SHS (NYSE:STM) as an undervalued stock. NYSE:STM maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Unpacking NYSE:STM's Valuation Rating

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:STM was assigned a score of 7 for valuation:

STM is valuated reasonably with a Price/Earnings ratio of 9.54.
Compared to the rest of the industry, the Price/Earnings ratio of STM indicates a rather cheap valuation: STM is cheaper than 97.25% of the companies listed in the same industry.
STM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.34.
A Price/Forward Earnings ratio of 11.14 indicates a reasonable valuation of STM.
Based on the Price/Forward Earnings ratio, STM is valued cheaper than 89.91% of the companies in the same industry.
STM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.80.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STM indicates a rather cheap valuation: STM is cheaper than 97.25% of the companies listed in the same industry.
STM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. STM is cheaper than 88.07% of the companies in the same industry.
The excellent profitability rating of STM may justify a higher PE ratio.

Analyzing Profitability Metrics

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's Return On Assets of 17.88% is amongst the best of the industry. STM outperforms 91.74% of its industry peers.
STM has a Return On Equity of 27.47%. This is amongst the best in the industry. STM outperforms 91.74% of its industry peers.
STM has a better Return On Invested Capital (25.82%) than 95.41% 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 10.70%.
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 82.57% 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 91.74% of its industry peers.
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.

How We Gauge Health for NYSE:STM

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:STM has earned a 6 out of 10:

STM has an Altman-Z score of 4.38. This indicates that STM is financially healthy and has little risk of bankruptcy at the moment.
STM has a debt to FCF ratio of 1.50. This is a very positive value and a sign of high solvency as it would only need 1.50 years to pay back of 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 71.56% 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.

A Closer Look at Growth for NYSE:STM

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 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
STM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.33% yearly.

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

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. 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.