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

Last update: Dec 11, 2024

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 Assessment of NYSE:STM

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:STM, the assigned 7 reflects its valuation:

STM is valuated reasonably with a Price/Earnings ratio of 10.83.
STM's Price/Earnings ratio is rather cheap when compared to the industry. STM is cheaper than 97.22% of the companies in the same industry.
STM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.16.
A Price/Forward Earnings ratio of 11.81 indicates a reasonable valuation of STM.
Based on the Price/Forward Earnings ratio, STM is valued cheaper than 94.44% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of STM to the average of the S&P500 Index (23.72), we can say STM is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, STM is valued cheaply inside the industry as 99.07% of the companies are valued more expensively.
STM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. STM is cheaper than 79.63% of the companies in the same industry.
The excellent profitability rating of STM may justify a higher PE ratio.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:STM has earned a 9 out of 10:

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.
With an excellent Return On Equity value of 29.96%, STM belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
STM has a Return On Invested Capital of 24.36%. This is amongst the best in the industry. STM outperforms 95.37% 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 11.23%.
The 3 year average ROIC (20.86%) for STM is below the current ROIC(24.36%), indicating increased profibility in the last year.
STM has a better Profit Margin (22.25%) than 82.41% of its industry peers.
STM's Profit Margin has improved in the last couple of years.
STM's Operating Margin of 23.58% is amongst the best of the industry. STM outperforms 82.41% of its industry peers.
STM's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of STM has grown nicely.

Understanding NYSE:STM's Health Score

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:

An Altman-Z score of 4.38 indicates that STM is not in any danger for 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.
Looking at the Debt to FCF ratio, with a value of 3.81, STM is in the better half of the industry, outperforming 62.04% of the companies in the same industry.
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.

Growth Insights: NYSE:STM

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:STM was assigned a score of 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.
STM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.33% yearly.

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

Our latest full fundamental report of STM contains the most current fundamental analsysis.

Disclaimer

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.