NYSE:STM is probably undervalued for the fundamentals it is displaying.

Last update: Nov 15, 2024

Uncover the hidden value in STMICROELECTRONICS NV-NY SHS (NYSE:STM) as our stock screening tool recommends it as an undervalued choice. NYSE:STM maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Evaluating Valuation: NYSE:STM

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 10.74.
Compared to the rest of the industry, the Price/Earnings ratio of STM indicates a rather cheap valuation: STM is cheaper than 95.37% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.81, STM is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.71, the valuation of STM can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of STM indicates a rather cheap valuation: STM is cheaper than 92.59% of the companies listed 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 23.56.
98.15% of the companies in the same industry are more expensive than STM, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, STM is valued a bit cheaper than 76.85% of the companies in the same industry.
The excellent profitability rating of STM may justify a higher PE ratio.

Assessing Profitability for NYSE:STM

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:

With an excellent Return On Assets value of 20.62%, STM belongs to the best of the industry, outperforming 96.30% of the companies in the same industry.
The Return On Equity of STM (29.96%) is better than 92.59% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.36%, STM belongs to the top of the industry, outperforming 95.37% 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 11.08%.
The last Return On Invested Capital (24.36%) for STM is above the 3 year average (20.86%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 22.25%, STM belongs to the top of the industry, outperforming 81.48% 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 23.58% is amongst the best of the industry. STM outperforms 82.41% 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.

Health Assessment of 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 4.36. This indicates that STM is financially healthy and has little risk of bankruptcy at the moment.
STM has a debt to FCF ratio of 3.81. This is a good value and a sign of high solvency as STM would need 3.81 years to pay back of all of its debts.
STM has a better Debt to FCF ratio (3.81) than 61.11% of its industry peers.
STM has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 2.27 indicates that STM has no problem at all paying its short term obligations.

Understanding NYSE:STM's Growth Score

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:STM scores a 4 out of 10:

STM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.72% yearly.
STM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.33% yearly.

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

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

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.