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STMicroelectronics
(NYSE:STM)
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Rating:55Neutral
Price Target:
$45.00
▼(-9.02% Downside)
Action:Reiterated
Date:10/24/26
The score is held back mainly by sharply compressed profitability and inconsistent free cash flow, alongside weak technicals with the stock trading below key moving averages. These are partially offset by an upbeat earnings call with accelerating revenue guidance, strong bookings/backlog, and raised data-center growth ambitions, though valuation remains demanding (high P/E with a low yield).
Positive Factors
Conservative balance sheet
STMicroelectronics has low leverage and a sizeable, stable equity base, giving it financial flexibility through semiconductor cycles. This supports continued investment in fabrication capacity, technology transitions, and strategic growth areas without relying excessively on additional borrowing.
Negative Factors
Severely compressed profitability
Profitability remains substantially below the prior cycle, with thin net and operating margins despite a modest revenue recovery. This limits internal cash generation and leaves earnings more sensitive to product mix, pricing, utilization, and the pace of semiconductor demand normalization.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
STMicroelectronics has low leverage and a sizeable, stable equity base, giving it financial flexibility through semiconductor cycles. This supports continued investment in fabrication capacity, technology transitions, and strategic growth areas without relying excessively on additional borrowing.
Read all positive factors
STMicroelectronics Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating strategic focus and market demand.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating strategic focus and market demand.
Data provided by:
The Fly
The FlySTMicroelectronics (STM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.43B
Dividend Yield0.82%
Average Volume (3M)9.54M
Price to Earnings (P/E)84.1
Beta (1Y)1.62
Revenue Growth10.06%
EPS Growth-27.68%
CountryUS
Employees49,157
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.52
Shares Outstanding911,281,900
10 Day Avg. Volume10,214,987
30 Day Avg. Volume9,535,004
Financial Highlights & Ratios
PEG Ratio-1.53
Price to Book (P/B)1.27
Price to Sales (P/S)1.91
P/FCF Ratio-435.83
Enterprise Value/Market Cap1.64
Enterprise Value/Revenue4.94
Enterprise Value/Gross Profit14.42
Enterprise Value/Ebitda24.26
Forecast
1Y Price Target
$77.40Price Target Upside56.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)1.35
Revenue Forecast (FY)$14.42B
STMicroelectronics Business Overview & Revenue Model
Company Description
STMicroelectronics N.V. is a global semiconductor company that designs, develops, manufactures, and markets a broad range of semiconductor products. Its offerings include analog chips, discrete power semiconductors, microcontrollers, and sensors, ...
How the Company Makes Money
STMicroelectronics primarily makes money by selling semiconductor products (integrated circuits and discrete components) to OEMs and other electronics manufacturers, generating revenue when chips are shipped under customer purchase orders or suppl...
STMicroelectronics Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial performance with meaningful revenue acceleration, improving profitability, positive free cash flow and substantial design wins (notably in optical connectivity and data center applications). Management raised data center revenue ambitions and highlighted large addressable markets (LEO satellite, quantum collaboration). Offsetting factors include ongoing nonrecurring manufacturing reshaping costs, temporary underloading/unloading charges, a materially negative margin in Power & Discrete, and near-term supply/ramping constraints for legacy analog and some microcontroller lines. Overall, the positives around revenue growth, bookings, cash flow and upgraded data center outlook materially outweigh the transitory headwinds tied to restructuring and ramping.Positive Updates
Revenue Beat and Sequential Growth
Q2 net revenues of $3.49 billion came in above the midpoint of outlook; Q3 guidance midpoint implies revenues of $3.7 billion (up ~6.2% sequentially) and Q4 guidance above $4.0 billion. Year-over-year revenue increases by end market: Communications Equipment & Computer Peripherals +50% YoY, Industrial +34% YoY, Personal Electronics +20% YoY, Automotive +16% YoY.
Negative Updates
Manufacturing Reshaping Costs and Unused Capacity Charges
Q2 included ~$58 million impairment/restructuring/phase-out charges and ~60 basis points negative impact on gross margin from nonrecurring costs related to the manufacturing reshaping program. Company expects a similar level of nonrecurring cost impact for the rest of the year and 70 bps of unused capacity charges included in Q3 guidance.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Beat and Sequential Growth
Q2 net revenues of $3.49 billion came in above the midpoint of outlook; Q3 guidance midpoint implies revenues of $3.7 billion (up ~6.2% sequentially) and Q4 guidance above $4.0 billion. Year-over-year revenue increases by end market: Communications Equipment & Computer Peripherals +50% YoY, Industrial +34% YoY, Personal Electronics +20% YoY, Automotive +16% YoY.
Read all positive updates
Company Guidance
ST guided Q3 2026 revenues of $3.7 billion (±350 bps), implying +6.2% sequential and +16.2% year‑over‑year growth, with gross margin about 37% (±200 bps) including ~70 bps of unused capacity charges (Q2 GM was 34.8%, non‑U.S. GAAP 35.2%); non‑U.S. GAAP net OpEx is expected at roughly $980 million in Q3 (would be ~$920M excluding start‑up and employee share award headwinds) and full‑year non‑U.S. GAAP OpEx is guided slightly above $3.8 billion (up low double‑digit YoY; like‑for‑like up high single‑digit); 2026 net CapEx is expected at the high end of $2.0–$2.2 billion. Management also raised its data‑center ambition to >$1 billion in 2026 and well above $2 billion in 2027, expects Q4 revenues >$4 billion (H2 vs H1 growth above their normal ~15% seasonality), reported book‑to‑bill ~2 (well above 2 in optical/comm), backlog ≈4.5–5 quarters, Q2 inventory $3.19B (126 days), Q2 free cash flow +$75M, net financial position $2.01B (liquidity $6.03B; debt $4.02B), and noted issuance of a $1.5B dual‑tranche convertible bond.STMicroelectronics Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
72
Positive
Cash Flow
48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.08B | 11.84B | 13.27B | 17.29B | 16.13B | 12.76B |
| Gross Profit | 4.49B | 4.01B | 5.22B | 8.29B | 7.63B | 5.33B |
| EBITDA | 2.67B | 2.26B | 3.72B | 6.38B | 5.71B | 3.42B |
| Net Income | 465.00M | 166.51M | 1.56B | 4.21B | 3.96B | 2.00B |
Balance Sheet | ||||||
| Total Assets | 27.03B | 24.80B | 24.74B | 24.45B | 19.98B | 15.54B |
| Cash, Cash Equivalents and Short-Term Investments | 6.03B | 4.92B | 6.18B | 6.08B | 4.52B | 3.52B |
| Total Debt | 4.03B | 2.13B | 3.17B | 3.17B | 2.91B | 2.74B |
| Total Liabilities | 8.98B | 6.58B | 7.06B | 7.60B | 7.22B | 6.27B |
| Stockholders Equity | 17.64B | 17.83B | 17.45B | 16.73B | 12.69B | 9.21B |
Cash Flow | ||||||
| Free Cash Flow | 216.33M | -52.00M | -216.00M | 1.46B | 1.57B | 1.12B |
| Operating Cash Flow | 2.26B | 2.15B | 2.96B | 5.99B | 5.20B | 3.06B |
| Investing Cash Flow | -1.31B | -43.00M | -3.74B | -5.77B | -4.59B | -1.52B |
| Financing Cash Flow | 545.74M | -1.56B | -155.00M | -267.00M | -567.00M | -1.31B |
STMicroelectronics Technical Analysis
Negative
49.46
Price Trends
50.74
Negative
58.22
Negative
49.52
Negative
Market Momentum
-2.08
Positive
32.86
Neutral
17.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STM, the sentiment is Negative. The current price of 49.46 is below the 20-day moving average (MA) of 50.67, below the 50-day MA of 50.74, and below the 200-day MA of 49.52, indicating a bearish trend. The MACD of -2.08 indicates Positive momentum. The RSI at 32.86 is Neutral, neither overbought nor oversold. The STOCH value of 17.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STM.
STMicroelectronics Risk Analysis
STMicroelectronics disclosed 35 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $189.50B | 46.17 | 12.26% | 1.10% | 33.65% | 114.59% | |
73 Outperform | $259.99B | 36.83 | 40.51% | 2.00% | 20.27% | 40.76% | |
72 Outperform | $59.24B | 19.94 | 28.05% | 1.73% | 8.77% | 39.24% | |
68 Neutral | $28.13B | 45.73 | 8.38% | ― | -3.14% | 44.55% | |
63 Neutral | $40.21B | 102.60 | 6.90% | 2.46% | 20.93% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $39.43B | 84.08 | 2.66% | 0.82% | 10.06% | -27.68% |
* Technology Sector Average
STM
STMicroelectronics
44.02
18.75
74.18%
ADI
Analog Devices
391.07
151.06
62.94%
MCHP
Microchip
74.05
11.15
17.72%
NXPI
NXP Semiconductors
234.92
17.21
7.90%
ON
ON Semiconductor
72.25
19.57
37.15%
TXN
Texas Instruments
284.69
119.56
72.40%
STMicroelectronics Corporate Events
STMicroelectronics Boosts Treasury Stock with October Share Buybacks
Oct 19, 2026
From October 12 to October 16, 2026, STMicroelectronics N.V. repurchased 492,285 ordinary shares on Euronext Paris under its previously approved buyback program, representing about 0.05% of its issued share capital at a weighted average price of E...
STMicroelectronics Adds to Treasury Stock with Late-August 2026 Share Buybacks
Aug 31, 2026
STMicroelectronics disclosed that, on August 24–25, 2026, it repurchased 128,904 ordinary shares on Euronext Paris under its previously announced buyback program approved in May 2024. The purchases, at a weighted average price of €42.6...
STMicroelectronics Files IFRS 2026 Semi-Annual Accounts with Dutch Regulator
Aug 19, 2026
On August 19, 2026, STMicroelectronics published its IFRS 2026 semi-annual accounts for the six-month period ended June 27, 2026, and filed them with the Netherlands Authority for the Financial Markets. The accounts, prepared under IFRS-EU, are no...
STMicroelectronics Files 2026 Semi-Annual IFRS Accounts with SEC
Aug 19, 2026
On August 19, 2026, STMicroelectronics announced that it had posted its 2026 Semi Annual Accounts prepared under IFRS, together with the STMicroelectronics N.V. Semi Annual IFRS Report for the period. The report, filed with the U.S. Securities and...
STMicroelectronics Updates August Share Buyback Activity Under Ongoing Repurchase Program
Aug 10, 2026
STMicroelectronics N.V., a global semiconductor manufacturer based in the Netherlands, designs and produces a broad portfolio of chips and solutions for automotive, industrial, and consumer electronics, leveraging integrated manufacturing and exte...
STMicroelectronics Reports Strong Second-Quarter 2026 Revenue and Margin Gains
Jul 30, 2026
On July 30, 2026, STMicroelectronics filed a Form 6-K with the U.S. Securities and Exchange Commission reporting unaudited results for the second quarter and first half ended June 27, 2026. The Form 6-K includes management’s operating and fi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.