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STMicroelectronics (STM) Dips More Than Broader Markets: What You Should Know

·3 min read

STMicroelectronics (STM) closed the most recent trading day at $34.33, moving -0.55% from the previous trading session. This change lagged the S&P 500's 0.41% loss on the day.

Prior to today's trading, shares of the chip company had lost 9.73% over the past month. This has lagged the Computer and Technology sector's loss of 9.08% and the S&P 500's loss of 5.13% in that time.

STMicroelectronics will be looking to display strength as it nears its next earnings release. In that report, analysts expect STMicroelectronics to post earnings of $1.05 per share. This would mark year-over-year growth of 105.88%.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.88 per share and revenue of $16.06 billion. These totals would mark changes of +79.63% and +25.88%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for STMicroelectronics. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. STMicroelectronics is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that STMicroelectronics has a Forward P/E ratio of 8.89 right now. This valuation marks a discount compared to its industry's average Forward P/E of 12.12.

It is also worth noting that STM currently has a PEG ratio of 1.78. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Semiconductor - General stocks are, on average, holding a PEG ratio of 1.86 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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