NYSE:STM appears to be flying under the radar despite its strong fundamentals.

Uncover the potential of STMICROELECTRONICS NV-NY SHS (NYSE:STM) as our stock screener's choice for an undervalued stock. NYSE:STM maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Valuation Insights: NYSE:STM

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:STM boasts a 7 out of 10:

• Based on the Price/Earnings ratio of 9.17, the valuation of STM can be described as reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of STM indicates a rather cheap valuation: STM is cheaper than 96.23% of the companies listed in the same industry.
• When comparing the Price/Earnings ratio of STM to the average of the S&P500 Index (26.07), we can say STM is valued rather cheaply.
• STM's Price/Forward Earnings ratio is rather cheap when compared to the industry. STM is cheaper than 93.40% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 22.41. STM is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STM indicates a rather cheap valuation: STM is cheaper than 96.23% of the companies listed in the same industry.
• 83.96% of the companies in the same industry are more expensive than STM, based on the Price/Free Cash Flow ratio.
• STM has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Analysis for NYSE:STM

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:

• STM's Return On Assets of 17.88% is amongst the best of the industry. STM outperforms 88.68% of its industry peers.
• STM's Return On Equity of 27.47% is amongst the best of the industry. STM outperforms 84.91% of its industry peers.
• STM has a better Return On Invested Capital (25.82%) than 95.28% 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 11.62%.
• 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 80.19% of the companies in the same industry.
• In the last couple of years the Profit Margin of STM has grown nicely.
• Looking at the Operating Margin, with a value of 30.01%, STM belongs to the top of the industry, outperforming 89.62% 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.

Health Analysis for NYSE:STM

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:STM, the assigned 6 for health provides valuable insights:

• An Altman-Z score of 5.24 indicates that STM is not in any danger for 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 better Debt to FCF ratio (1.50) than 72.64% 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.
• A Current Ratio of 2.15 indicates that STM has no problem at all paying its short term obligations.

Growth Analysis for NYSE:STM

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:STM has achieved a 6 out of 10:

• The Earnings Per Share has grown by an impressive 52.63% over the past year.
• 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.
• The Revenue has grown by 22.51% in the past year. 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.

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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 in any way. 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.