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STMicroelectronics (STM)
NYSE:STM
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STMicroelectronics
(NYSE:STM)
69Neutral
Positive Factors
Bookings and Demand
Auto and Industrial bookings are trending in the right direction—both above 1x and growing in dollar terms.
Market Position
ST maintained its number-one position in general-purpose MCUs in 2024, with share gains.
Revenue Guidance
After a sharp 25% decline in revenue this quarter, ST is guiding to 8% growth for the second quarter, leading to a relief rally.
Negative Factors
Demand Visibility
The 2H growth trajectory is difficult to model, and ST seems to have less visibility than peers in auto and industrial given elevated downstream inventory.
Inventory Challenges
Inventory days surged to 167 days, a historical high, which will impede on second-half gross margin recovery and extend under-utilization charges.
Margin Pressures
Underloadings and lower capacity reservation fees continue to pressure gross margins.
STMicroelectronics (STM) vs. S&P 500 (SPY)
Market Cap
$20.58B
Dividend Yield1.31%
Average Volume (3M)8.66M
Price to Earnings (P/E)19.7
Beta (1Y)1.69
Revenue Growth-25.35%
EPS Growth-70.00%
CountryUS
Employees49,602
SectorTechnology
Sector Strength62
IndustrySemiconductors
Share Statistics
EPS (TTM)1.17
Shares Outstanding902,771,060
10 Day Avg. Volume8,203,607
30 Day Avg. Volume8,659,985
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.87
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.42
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.50Price Target Upside10.15% Upside
Rating ConsensusHold
Number of Analyst Covering9
STMicroelectronics Business Overview & Revenue Model
Company DescriptionSTMicroelectronics (STM) is a global leader in the semiconductor industry, specializing in providing products and solutions for a wide range of electronics applications. The company operates in various sectors, including automotive, industrial, personal electronics, and communications equipment. Its core products encompass microcontrollers, sensors, power management devices, and analog ICs, which are integral to the functioning of modern electronic systems.
How the Company Makes MoneySTMicroelectronics generates revenue through the design, manufacture, and sale of semiconductor products. The company's revenue streams are primarily derived from its diverse product portfolio, catering to multiple sectors such as automotive, industrial, and personal electronics. STM's microcontrollers and digital ICs are widely used in automotive and industrial applications, while its sensors and power management solutions are integral to consumer electronics. Additionally, STM benefits from strategic partnerships and collaborations with leading technology companies, which enhance its market reach and innovation capabilities. The company's extensive R&D efforts and its ability to deliver cutting-edge technology solutions play a crucial role in maintaining its competitive edge and driving revenue growth.
STMicroelectronics Financial Statement Overview
Summary
STMicroelectronics demonstrates solid profitability and balance sheet stability, characteristic of a strong semiconductor company. Despite recent revenue and free cash flow declines, the company sustains good profit margins and low leverage. The financial position is supported by robust equity and manageable debt levels, though attention to revenue growth and free cash flow improvements will be crucial moving forward.Income Statement
STMicroelectronics shows strong profitability with a consistent gross profit margin of 37.5% in TTM. However, there is a noticeable decline in revenue from $13.269B in 2024 to $12.322B in TTM, indicating a revenue growth rate of -7.14%. The net profit margin stands at 8.93% for TTM, reflecting effective cost management. Despite the revenue decline, profitability metrics such as EBIT margin at 8.88% and EBITDA margin at 23.39% remain robust, underscoring operational efficiency.78
Positive
Balance Sheet
The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.16, indicating low leverage. The equity ratio is strong at 71.1%, showing that a significant portion of assets is financed by equity. Return on equity (ROE) is solid at 6.21%, reflecting effective use of equity capital. The balance sheet stability is a strong point for STMicroelectronics, allowing for potential growth opportunities.82
Very Positive
Cash Flow
Cash flow analysis highlights a challenging environment with a decrease in free cash flow from $1.456B in 2023 to $235M in TTM, marking substantial volatility. The operating cash flow to net income ratio is 2.43, which indicates strong cash generation capability relative to net income. However, the free cash flow to net income ratio is only 0.21, suggesting limited free cash generation relative to net income, posing a potential risk if this trend continues.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 13.27B | 17.29B | 16.13B | 12.76B | 10.22B | Gross Profit |
| 5.22B | 8.29B | 7.33B | 5.05B | 3.40B | EBIT |
| 1.68B | 4.61B | 4.53B | 2.45B | 1.23B | EBITDA |
| 3.72B | 6.38B | 6.40B | 3.61B | 2.27B | Net Income Common Stockholders |
| 1.56B | 4.21B | 3.96B | 2.00B | 694.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.18B | 6.08B | 4.59B | 3.52B | 3.85B | Total Assets |
| 24.74B | 24.45B | 20.99B | 16.41B | 15.31B | Total Debt |
| 3.17B | 3.17B | 2.57B | 2.53B | 2.62B | Net Debt |
| 885.00M | -49.00M | -686.00M | -691.00M | -389.00M | Total Liabilities |
| 7.06B | 7.60B | 7.48B | 6.83B | 7.00B | Stockholders Equity |
| 17.45B | 16.73B | 13.44B | 9.52B | 8.25B |
| Cash Flow | Free Cash Flow | |||
| -216.00M | 1.46B | 2.05B | 1.19B | 804.00M | Operating Cash Flow |
| 2.96B | 5.99B | 5.58B | 3.46B | 2.46B | Investing Cash Flow |
| -3.74B | -5.71B | -4.98B | -1.86B | -2.34B | Financing Cash Flow |
| -155.00M | -267.00M | -556.00M | -1.37B | 279.00M |
STMicroelectronics Technical Analysis
Neutral
23.15
Price Trends
23.27
Negative
23.97
Negative
26.72
Negative
Market Momentum
>-0.01
Negative
55.72
Neutral
92.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STM, the sentiment is Neutral. The current price of 23.15 is above the 20-day moving average (MA) of 20.81, below the 50-day MA of 23.27, and below the 200-day MA of 26.72, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.72 is Neutral, neither overbought nor oversold. The STOCH value of 92.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STM.
STMicroelectronics Risk Analysis
STMicroelectronics disclosed 33 risk factors in its most recent earnings report. STMicroelectronics reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
STMicroelectronics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $17.43B | 12.59 | 11.65% | 5.09% | 2.22% | -22.39% | |
74 Outperform | $18.41B | 18.66 | 10.32% | 2.62% | -0.62% | -1.08% | |
69 Neutral | $20.58B | 19.73 | 6.33% | 1.31% | -25.35% | -70.00% | |
68 Neutral | $16.90B | 11.02 | 18.97% | ― | -14.19% | -27.42% | |
66 Neutral | $25.28B | 82.90 | 4.71% | 3.87% | -44.31% | -86.74% | |
59 Neutral | $19.48B | 28.15 | -2.42% | ― | -8.69% | -125.98% | |
59 Neutral | $10.72B | 10.37 | -6.60% | 3.02% | 7.37% | -11.29% |
* Technology Sector Average
Performance Comparison
STM
STMicroelectronics
22.98
-16.16
-41.29%
ASX
ASE Technology Holding Co
8.70
-1.13
-11.50%
MCHP
Microchip
45.92
-43.83
-48.84%
ON
ON Semiconductor
38.86
-31.30
-44.61%
UMC
United Micro
6.92
-0.47
-6.36%
GFS
GlobalFoundries Inc
34.65
-14.23
-29.11%
STMicroelectronics Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 6.29%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Negative
The earnings call highlighted STMicroelectronics' innovative strides in microcontrollers and personal electronics, as well as positive developments in sustainability. However, these positives are overshadowed by significant revenue declines, challenges in the automotive sector, high inventory levels, and substantial drops in operating margins and net income.Q1-2025 Updates
Positive Updates
Positive Book-to-Bill Ratios
The company reported a book-to-bill ratio above one for both the automotive and industrial sectors, indicating potential growth in these areas.
Innovations in Automotive Microcontrollers
Notable progress in automotive microcontrollers with the introduction of new products set to launch in 2025 and 2026, which are expected to drive revenue growth.
Strong Performance in Personal Electronics
The personal electronics segment performed slightly better than expected, with innovative advancements in MEMS, optical sensing, and analog technology.
Leadership in General-Purpose Microcontrollers
The STM32 microcontrollers maintained a number one ranking in the general-purpose microcontroller market, with a market share that has consistently grown.
Sustainability Efforts
STMicroelectronics issued its first annual integrated report and is on track to achieve carbon neutrality by 2027.
Negative Updates
Significant Revenue Decline
On a year-over-year basis, Q1 net revenues decreased 27.3% to $2.52 billion, and the gross margin decreased to 33.4% from 41.7%.
Automotive Revenue Challenges
The automotive segment saw lower revenues across all geographies, with a decline of about 39% year-over-year, and full-year revenues expected to decline.
High Inventory Levels
Inventory at the end of Q1 was $3.01 billion, with days of sales of inventory at 167 days, indicating slow inventory turnover.
Operating Margin Decline
Operating margin decreased to 0.1% from 15.9% year-over-year, reflecting significant challenges in maintaining profitability.
Net Income Drop
Net income decreased 89.1% to $50 million, a substantial drop indicating financial struggles.
Economic Uncertainty and Tariff Concerns
Uncertainty around global trade tariffs and the economic environment is impacting the company's outlook and planning.
Company Guidance
During the STMicroelectronics Q1 2025 earnings call, the company reported a 27.3% year-over-year decrease in net revenues to $2.52 billion, with a gross margin reduction from 41.7% to 33.4%. Operating margin dropped significantly from 15.9% to 0.1%, and net income fell 89.1% to $50 million. The automotive segment experienced lower revenues, but the company maintained a book-to-bill ratio above one, indicating future growth potential. STMicroelectronics also highlighted the progress in its automotive microcontroller portfolio, with strong design momentum in regions like China, EMEA, and the Americas. The company continues to focus on reshaping its manufacturing footprint, targeting $2 billion to $2.3 billion in CapEx for 2025 to enhance its 300-millimeter silicon and 200-millimeter silicon carbide capabilities. Despite market uncertainties, STMicroelectronics remains committed to its medium-term growth drivers, including MEMS, optical sensing solutions, and microcontrollers, while aiming for carbon neutrality by 2027.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.