Investors should take notice of NYSE:STM—it offers a great deal for the fundamentals it presents.

Last update: Oct 23, 2024

Our stock screener has spotted STMICROELECTRONICS NV-NY SHS (NYSE:STM) as an undervalued stock with solid fundamentals. NYSE:STM shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Understanding NYSE:STM's Valuation Score

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:STM has received a 7 out of 10:

A Price/Earnings ratio of 8.60 indicates a reasonable valuation of STM.
Based on the Price/Earnings ratio, STM is valued cheaply inside the industry as 98.17% 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 31.10.
A Price/Forward Earnings ratio of 10.49 indicates a reasonable valuation of STM.
STM's Price/Forward Earnings ratio is rather cheap when compared to the industry. STM is cheaper than 95.41% of the companies in the same industry.
STM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.54.
98.17% of the companies in the same industry are more expensive than STM, based on the Enterprise Value to EBITDA ratio.
STM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. STM is cheaper than 75.23% of the companies in the same industry.
STM has an outstanding profitability rating, which may justify a higher PE ratio.

Exploring 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:

Looking at the Return On Assets, with a value of 20.62%, STM belongs to the top of the industry, outperforming 96.33% of the companies in the same industry.
Looking at the Return On Equity, with a value of 29.96%, STM belongs to the top of the industry, outperforming 92.66% of the companies in the same industry.
STM's Return On Invested Capital of 24.36% is amongst the best of the industry. STM outperforms 95.41% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for STM is significantly above the industry average of 10.66%.
The 3 year average ROIC (20.86%) for STM is below the current ROIC(24.36%), indicating increased profibility in the last year.
STM's Profit Margin of 22.25% is amongst the best of the industry. STM outperforms 82.57% of its industry peers.
STM's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 23.58%, STM belongs to the best of the industry, outperforming 81.65% of the companies in the same industry.
STM's Operating Margin has improved in the last couple of years.
STM's Gross Margin has improved in the last couple of years.

Understanding NYSE:STM's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:STM, the assigned 5 reflects its health status:

STM has an Altman-Z score of 4.47. This indicates that STM is financially healthy and has little risk of bankruptcy at the moment.
The Debt to FCF ratio of STM is 3.81, which is a good value as it means it would take STM, 3.81 years of fcf income to pay off all of its debts.
STM has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
STM has a Current Ratio of 2.27. This indicates that STM is financially healthy and has no problem in meeting its short term obligations.

Growth Analysis 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 5 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 a strong growth in Revenue. In the last year, the Revenue has grown by 38.49%.
The Revenue has been growing by 12.33% on average over the past years. This is quite good.

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

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

Disclaimer

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.