STMicroelectronics N.V. (NYSE: STM)

Sector: Technology Industry: Semiconductors CIK: 0000932787
Market Cap 25.10 Bn
P/B 1.40
P/E 46.73
P/S 2.13
ROIC (Qtr) 1.68
Div Yield % 1.60
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...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,521.08 Bn 45.58 24.16 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,648.98 Bn 31.97 13.84 31.18 Bn
3 AVGO Broadcom Inc. 1,565.97 Bn 67.71 24.51 65.14 Bn
4 MU Micron Technology Inc 366.37 Bn 30.76 8.66 12.43 Bn
5 AMD Advanced Micro Devices Inc 333.34 Bn 100.83 10.41 3.87 Bn
6 INTC Intel Corp 271.33 Bn 1,370.33 5.08 46.55 Bn
7 QCOM Qualcomm Inc/De 199.55 Bn 36.01 4.51 14.81 Bn
8 TXN Texas Instruments Inc 172.17 Bn 34.14 9.97 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.07 4.13
EV to Cash from Ops. EV/CFO 12.24 -370.81
EV to Debt EV to Debt 12.21 88.27
EV to EBIT EV/EBIT 54.51 -65.23
EV to EBITDA EV/EBITDA 11.78 22.97
EV to Free Cash Flow [EV/FCF] EV/FCF -231.90 -8.14
EV to Market Cap EV to Market Cap 1.05 0.80
EV to Revenue EV/Rev 2.24 20.31
Price to Book Value [P/B] P/B 1.40 5.16
Price to Earnings [P/E] P/E 46.73 9.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.67 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 60.00 8.25
Dividend per Basic Share Div per Share (Qtr) 0.36 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -283.46 9.91
Interest Coverage Int. cover (Qtr) -2.65 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 37.95 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -35.03 45.60
Dividend Growth (1y) % Div 1y % (Qtr) 20.00 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -81.35 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -44.63 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) -78.87 25.83
EBT Growth (1y) % EBT 1y % (Qtr) -73.46 39.93
EPS Growth (1y) % EPS 1y % (Qtr) -76.38 24.64
FCF Growth (1y) % FCF 1y % (Qtr) -212.87 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -31.06 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.48 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.09
Cash Ratio Cash Ratio (Qtr) 0.59 2.23
Current Ratio Curr Ratio (Qtr) 3.22 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.12 0.34
Interest Cover Ratio Int Coverage (Qtr) -2.65 8.38
Times Interest Earned Times Interest Earned (Qtr) -2.65 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.60 -112.38
EBIT Margin % EBIT Margin % (Qtr) 4.11 -91.98
EBT Margin % EBT Margin % (Qtr) 5.66 -132.25
Gross Margin % Gross Margin % (Qtr) 34.60 47.73
Net Profit Margin % Net Margin % (Qtr) 4.60 -133.26