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STMicroelectronics NV ADR STM

Morningstar Rating
$44.19 −0.37 (0.82%)
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Company Report

STMicro: One of Our Top Picks in Technology as Near-Term Auto and EV Weakness Seems Overdone

Narrow-moat STMicroelectronics, or ST, is one of our top picks in the technology sector, as our fair value estimates of $66 for U.S. shares and EUR 63 for European shares offer an attractive margin of safety for long-term, patient investors, in our opinion. We continue to like the long-term secular tailwinds in the automotive end market, as ST should profit from increased chip content per car, especially in electric vehicles. The company has also achieved nice gross margin expansion in recent years, and we foresee the company maintaining these margins in the long run.

Price vs Fair Value

STM is trading at a 32% discount.
Price
$44.57
Fair Value
$26.00
Uncertainty
High
1-Star Price
$474.40
5-Star Price
$72.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

STMicroelectronics has an early lead and is recognizing exponential growth in silicon carbide-based power semis, most notably those included in the inverters in Tesla's electric vehicles.

Bears

STMicroelectronics has a greater presence in certain types of lower-margin power semiconductors that, when combined with significant manufacturing capacity, may depress future returns relative to some of its U.S.-based pure-play analog peers.

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News

Trading Information

Previous Close Price
$44.56
Day Range
$44.1044.41
52-Week Range
$37.2155.85
Bid/Ask
$44.17 / $44.19
Market Cap
$39.85 Bil
Volume/Avg
297,149 / 3.0 Mil

Key Statistics

Price/Earnings (Normalized)
9.70
Price/Sales
2.46
Dividend Yield (Trailing)
0.54%
Dividend Yield (Forward)
0.54%
Total Yield
1.41%

Company Profile

A merger between Italian firm SGS Microelettronica and the nonmilitary business of Thomson Semiconductors in France formed STMicroelectronics in 1987. STMicroelectronics is a leader in a variety of semiconductor products, including analog chips, discrete power semiconductors, microcontrollers, and sensors. It is an especially prominent chip supplier to the industrial and automotive industries.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
51,370

Competitors

Valuation

Metric
STM
NXPI
ON
Price/Earnings (Normalized)
9.7016.9915.62
Price/Book Value
2.436.984.47
Price/Sales
2.464.614.42
Price/Cash Flow
7.0214.9612.85
Price/Earnings
STM
NXPI
ON

Financial Strength

Metric
STM
NXPI
ON
Quick Ratio
2.081.201.57
Current Ratio
2.941.922.71
Interest Coverage
105.578.4033.66
Quick Ratio
STM
NXPI
ON

Profitability

Metric
STM
NXPI
ON
Return on Assets (Normalized)
22.59%13.55%17.76%
Return on Equity (Normalized)
34.87%40.71%32.34%
Return on Invested Capital (Normalized)
27.88%17.71%21.53%
Return on Assets
STM
NXPI
ON
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