STMICROELECTRONICS NV-NY SHS (STM) Stock Fundamental Analysis
NYSE:STM - New York Stock Exchange, Inc. - US8610121027 - Currency: USD
We assign a fundamental rating of 5 out of 10 to STM. STM was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. While STM has a great profitability rating, there are some minor concerns on its financial health. STM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year STM was profitable.
In the past year STM had a positive cash flow from operations.
Each year in the past 5 years STM has been profitable.
In the past 5 years STM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.71%, STM is in the better half of the industry, outperforming 75.45% of the companies in the same industry.
The Return On Equity of STM (10.78%) is better than 70.00% of its industry peers.
STM's Return On Invested Capital of 7.86% is fine compared to the rest of the industry. STM outperforms 74.55% of its industry peers.
STM had an Average Return On Invested Capital over the past 3 years of 17.63%. This is significantly above the industry average of 10.57%.
The 3 year average ROIC (17.63%) for STM is well above the current ROIC(7.86%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.71% | ||
| ROE | 10.78% | ||
| ROIC | 7.86% |
ROA(3y)15.52%
ROA(5y)12.31%
ROE(3y)23.34%
ROE(5y)19.28%
ROIC(3y)17.63%
ROIC(5y)15.95%
1.3 Margins
With a decent Profit Margin value of 14.97%, STM is doing good in the industry, outperforming 73.64% of the companies in the same industry.
In the last couple of years the Profit Margin of STM has grown nicely.
STM has a Operating Margin of 14.36%. This is in the better half of the industry: STM outperforms 71.82% of its industry peers.
STM's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 37.74%, STM is not doing good in the industry: 62.73% of the companies in the same industry are doing better.
STM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.36% | ||
| PM (TTM) | 14.97% | ||
| GM | 37.74% |
OM growth 3Y-10.37%
OM growth 5Y2.22%
PM growth 3Y3.75%
PM growth 5Y29.89%
GM growth 3Y-1.84%
GM growth 5Y1.2%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so STM is still creating some value.
Compared to 1 year ago, STM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.98 indicates that STM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.98, STM is in line with its industry, outperforming 58.18% of the companies in the same industry.
A Debt/Equity ratio of 0.07 indicates that STM is not too dependend on debt financing.
The Debt to Equity ratio of STM (0.07) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.98 |
ROIC/WACC0.74
WACC10.55%
2.3 Liquidity
A Current Ratio of 2.60 indicates that STM has no problem at all paying its short term obligations.
STM has a Current ratio of 2.60. This is comparable to the rest of the industry: STM outperforms 41.82% of its industry peers.
STM has a Quick Ratio of 1.98. This is a normal value and indicates that STM is financially healthy and should not expect problems in meeting its short term obligations.
STM has a Quick ratio (1.98) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.6 | ||
| Quick Ratio | 1.98 |
3. Growth
3.1 Past
STM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -69.49%.
STM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.62% yearly.
STM shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -23.24%.
The Revenue has been growing slightly by 6.79% on average over the past years.
EPS 1Y (TTM)-69.49%
EPS 3Y-8.4%
EPS 5Y7.62%
EPS Q2Q%-87.04%
Revenue 1Y (TTM)-23.24%
Revenue growth 3Y1.31%
Revenue growth 5Y6.79%
Sales Q2Q%-27.36%
3.2 Future
STM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.46% yearly.
The Revenue is expected to grow by 5.66% on average over the next years.
EPS Next Y-52.53%
EPS Next 2Y2.42%
EPS Next 3Y14.06%
EPS Next 5Y13.46%
Revenue Next Year-13.61%
Revenue Next 2Y-0.68%
Revenue Next 3Y3.35%
Revenue Next 5Y5.66%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.09, the valuation of STM can be described as rather expensive.
Based on the Price/Earnings ratio, STM is valued a bit cheaper than 70.91% of the companies in the same industry.
STM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.35, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 16.47, which indicates a correct valuation of STM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of STM indicates a somewhat cheap valuation: STM is cheaper than 72.73% of the companies listed in the same industry.
STM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.09 | ||
| Fwd PE | 16.47 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STM indicates a rather cheap valuation: STM is cheaper than 96.36% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.9 |
4.3 Compensation for Growth
STM has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as STM's earnings are expected to grow with 14.06% in the coming years.
PEG (NY)N/A
PEG (5Y)3.16
EPS Next 2Y2.42%
EPS Next 3Y14.06%
5. Dividend
5.1 Amount
STM has a Yearly Dividend Yield of 1.39%.
Compared to an average industry Dividend Yield of 2.50, STM pays a better dividend. On top of this STM pays more dividend than 83.64% of the companies listed in the same industry.
With a Dividend Yield of 1.39, STM pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
The dividend of STM has a limited annual growth rate of 0.51%.
STM has paid a dividend for at least 10 years, which is a reliable track record.
STM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.51%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
STM pays out 14.49% of its income as dividend. This is a sustainable payout ratio.
The dividend of STM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP14.49%
EPS Next 2Y2.42%
EPS Next 3Y14.06%
28.67
-0.35 (-1.21%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners30.25%
Inst Owner Change21.89%
Ins Owners0%
Ins Owner ChangeN/A
Market Cap26.13B
Analysts75.17
Price Target29.99 (4.6%)
Short Float %2.61%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
Yearly Dividend0.25
Dividend Growth(5Y)0.51%
DP14.49%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.89%
Min EPS beat(2)2.3%
Max EPS beat(2)13.48%
EPS beat(4)3
Avg EPS beat(4)2.24%
Min EPS beat(4)-7.15%
Max EPS beat(4)13.48%
EPS beat(8)6
Avg EPS beat(8)3.97%
EPS beat(12)10
Avg EPS beat(12)8.21%
EPS beat(16)13
Avg EPS beat(16)7.72%
Revenue beat(2)0
Avg Revenue beat(2)-2.55%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)-2.41%
Revenue beat(4)0
Avg Revenue beat(4)-3.52%
Min Revenue beat(4)-6.85%
Max Revenue beat(4)-2.12%
Revenue beat(8)0
Avg Revenue beat(8)-2.96%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.57%
PT rev (3m)0.49%
EPS NQ rev (1m)11.55%
EPS NQ rev (3m)-43.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-18.71%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.09 | ||
| Fwd PE | 16.47 | ||
| P/S | 1.97 | ||
| P/FCF | N/A | ||
| P/OCF | 7.82 | ||
| P/B | 1.42 | ||
| P/tB | 1.57 | ||
| EV/EBITDA | 4.9 |
EPS(TTM)1.19
EY4.15%
EPS(NY)1.74
Fwd EY6.07%
FCF(TTM)-0.21
FCFYN/A
OCF(TTM)3.67
OCFY12.79%
SpS14.56
BVpS20.23
TBVpS18.27
PEG (NY)N/A
PEG (5Y)3.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.71% | ||
| ROE | 10.78% | ||
| ROCE | 8.97% | ||
| ROIC | 7.86% | ||
| ROICexc | 11.08% | ||
| ROICexgc | 12.57% | ||
| OM | 14.36% | ||
| PM (TTM) | 14.97% | ||
| GM | 37.74% | ||
| FCFM | N/A |
ROA(3y)15.52%
ROA(5y)12.31%
ROE(3y)23.34%
ROE(5y)19.28%
ROIC(3y)17.63%
ROIC(5y)15.95%
ROICexc(3y)24.99%
ROICexc(5y)22.51%
ROICexgc(3y)26.72%
ROICexgc(5y)25.26%
ROCE(3y)20.12%
ROCE(5y)18.2%
ROICexcg growth 3Y-22.57%
ROICexcg growth 5Y-8.43%
ROICexc growth 3Y-20.96%
ROICexc growth 5Y-6.72%
OM growth 3Y-10.37%
OM growth 5Y2.22%
PM growth 3Y3.75%
PM growth 5Y29.89%
GM growth 3Y-1.84%
GM growth 5Y1.2%
F-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 0.35 | ||
| Cap/Depr | 171.94% | ||
| Cap/Sales | 26.64% | ||
| Interest Coverage | 24.11 | ||
| Cash Conversion | 84.37% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.6 | ||
| Quick Ratio | 1.98 | ||
| Altman-Z | 3.98 |
F-Score5
WACC10.55%
ROIC/WACC0.74
Cap/Depr(3y)232.76%
Cap/Depr(5y)199.58%
Cap/Sales(3y)26.55%
Cap/Sales(5y)22.73%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-69.49%
EPS 3Y-8.4%
EPS 5Y7.62%
EPS Q2Q%-87.04%
EPS Next Y-52.53%
EPS Next 2Y2.42%
EPS Next 3Y14.06%
EPS Next 5Y13.46%
Revenue 1Y (TTM)-23.24%
Revenue growth 3Y1.31%
Revenue growth 5Y6.79%
Sales Q2Q%-27.36%
Revenue Next Year-13.61%
Revenue Next 2Y-0.68%
Revenue Next 3Y3.35%
Revenue Next 5Y5.66%
EBIT growth 1Y-73.12%
EBIT growth 3Y-9.19%
EBIT growth 5Y9.16%
EBIT Next Year46.94%
EBIT Next 3Y39.3%
EBIT Next 5Y26.52%
FCF growth 1Y-113.14%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-47.5%
OCF growth 3Y-1.17%
OCF growth 5Y8.75%