STMicroelectronics N.V. (STM) Stock Analysis and Metrics

Sector: Technology Industry: Semiconductors CIK: 0000932787

P/B 1.30

P/E 43.33

P/S 1.97

Market Cap 23.27 Bn

ROIC (Qtr) 1.68

Div Yield % 1.38

Rev 1y % (Qtr) -1.97

Total Debt (Qtr) 2.17 Bn

Debt/Equity (Qtr) 0.12

About

STMicroelectronics N.V., known by its ticker symbol STM, is a prominent player in the global semiconductor industry. This dynamic and highly competitive sector is characterized by rapid evolution, and STMicroelectronics has established itself as a leading designer, developer, and manufacturer of a wide array of semiconductor products and subsystems. The company's revenue is primarily generated through the sale of its semiconductor products, which encompass microcontrollers, memory chips, logic chips, and analog and mixed-signal chips. These products...

STMicroelectronics N.V., known by its ticker symbol STM, is a prominent player in the global semiconductor industry. This dynamic and highly competitive sector is characterized by rapid evolution, and STMicroelectronics has established itself as a leading designer, developer, and manufacturer of a wide array of semiconductor products and subsystems.

The company's revenue is primarily generated through the sale of its semiconductor products, which encompass microcontrollers, memory chips, logic chips, and analog and mixed-signal chips. These products find applications in various sectors, including automotive, industrial, consumer, and medical devices. Among STMicroelectronics' primary products are its STM32 microcontrollers, a family of 32-bit microcontrollers that are widely used in automotive, industrial, and consumer devices, and its memory products, which include flash memory and SRAM, utilized in applications such as smartphones, tablets, and laptops.

STMicroelectronics' microcontrollers segment is a substantial contributor to the company's revenue. This segment specializes in the design, development, and manufacture of a diverse range of microcontrollers, with the STM32 family being a standout product. The STM32 microcontrollers are highly regarded for their high performance, low power consumption, and ease of use, making them a popular choice among developers. These microcontrollers have a wide range of applications, including automotive, industrial, and consumer devices, such as smartphones, tablets, and laptops.

The memory products segment is another significant contributor to STMicroelectronics' revenue. This segment designs, develops, and manufactures a variety of memory products, such as flash memory and SRAM. Flash memory is employed in applications such as smartphones, tablets, and laptops, while SRAM is used in applications such as servers and data centers. STMicroelectronics' memory products are recognized for their high performance, low power consumption, and reliability, making them a preferred choice among developers.

STMicroelectronics is a leading player in the global semiconductor industry, with a robust presence in the automotive, industrial, and consumer markets. The company faces competition from other leading semiconductor companies, including Intel, Texas Instruments, and NXP Semiconductors. STMicroelectronics' competitive advantages include its strong brand recognition, extensive product portfolio, and global distribution network. The company's diverse product range makes it a one-stop-shop for many developers, catering to a wide range of applications in various sectors.

STMicroelectronics' customer base includes a diverse group of companies, such as automotive manufacturers, industrial equipment manufacturers, and consumer electronics companies. The company's products are employed in numerous applications, including automotive infotainment systems, industrial automation systems, and consumer electronics devices like smartphones and tablets.

Among STMicroelectronics' brand names and trade names are its STM32 microcontrollers and its memory products, including flash memory and SRAM. These products are known for their high performance, low power consumption, and reliability, making them popular choices in their respective application domains.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 2.16B provides robust 1x coverage of total debt 2.17B, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 2B provide 7.81x coverage of short-term debt 256M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 24.04B provides 11.10x coverage of total debt 2.17B, indicating robust asset backing and low credit risk.
Operating cash flow of 2.16B provides exceptional 719.67x coverage of minority interest expenses 3M, showing strong core operations.
Operating cash flow of 2.16B provides strong 10.79x coverage of stock compensation 200M, indicating sustainable incentive practices.

Cons

Operating cash flow of 2.16B barely covers its investment activities of (1.57B), with a coverage ratio of -1.37, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (1.57B) provide weak support for R&D spending of 2.03B, which is -0.78x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of 2.16B provides thin coverage of dividend payments of (321M) with a -6.73 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Free cash flow of (114M) provides weak coverage of capital expenditures of 2.27B, with a -0.05 ratio suggesting additional external financing needs for growth initiatives.
Operating earnings of 485M show weak coverage of depreciation charges of 1.82B, with a 0.27 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Semiconductors

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NVDA	Nvidia Corp	4,276.26 Bn	43.11	22.85	10.48 Bn
2	AVGO	Broadcom Inc.	1,690.87 Bn	89.31	28.22	64.23 Bn
3	TSM	Taiwan Semiconductor Manufacturing Co Ltd	1,514.32 Bn	29.36	12.71	31.18 Bn
4	AMD	Advanced Micro Devices Inc	343.27 Bn	103.83	10.72	3.87 Bn
5	MU	Micron Technology Inc	269.16 Bn	31.52	7.20	15.28 Bn
6	INTC	Intel Corp	249.55 Bn	1,260.33	4.67	46.55 Bn
7	QCOM	Qualcomm Inc/De	195.62 Bn	35.30	4.42	14.81 Bn
8	TXN	Texas Instruments Inc	163.92 Bn	32.50	9.49	14.05 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.00	3.95
EV to Cash from Ops.	11.40	-331.60
EV to Debt	11.36	86.14
EV to EBIT	50.74	-55.96
EV to EBITDA	10.97	20.88
EV to Free Cash Flow [EV/FCF]	-215.89	-4.09
EV to Market Cap	1.06	0.80
EV to Revenue	2.09	18.79
Price to Book Value [P/B]	1.30	5.23
Price to Earnings [P/E]	43.33	12.47

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	1.67	2.29
Dividend Payout Ratio %	60.00	8.00
Dividend per Basic Share	0.36	0.62
FCF Dividend Payout Ratio %	-283.46	10.38
Interest Coverage	-2.65	8.19

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	37.95	-155.77
Cash and Equivalents Growth (1y) %	-35.03	44.44
Dividend Growth (1y) %	20.00	5.30
EBIAT Growth (1y) %	-81.35	34.22
EBITDA Growth (1y) %	-44.63	47.50
EBIT Growth (1y) %	-78.87	30.14
EBT Growth (1y) %	-73.46	47.04
EPS Growth (1y) %	-76.38	36.18
FCF Growth (1y) %	-212.87	252.76
Gross Profit Growth (1y) %	-31.06	43.92

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.48	0.49
Cash Payout Ratio	0.07	0.09
Cash Ratio	0.59	2.23
Current Ratio	3.22	5.43
Debt to Equity Ratio	0.12	0.34
Interest Cover Ratio	-2.65	8.19
Times Interest Earned	-2.65	8.19

Profitability

Metric	Value	Industry
EBITDA Margin %	19.60	-112.44
EBIT Margin %	4.11	-92.10
EBT Margin %	5.66	-132.39
Gross Margin %	34.60	47.63
Net Profit Margin %	4.60	-133.41

STMicroelectronics N.V. (NYSE: STM)