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STMicroelectronics (STM) Outpaces Stock Market Gains: What You Should Know

STMicroelectronics (STM) closed the most recent trading day at $36.12, moving +0.78% from the previous trading session. This change outpaced the S&P 500's 0.69% gain on the day. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, lost 0.2%.

Heading into today, shares of the chip company had lost 2.37% over the past month, outpacing the Computer and Technology sector's loss of 14.62% and the S&P 500's loss of 9.94% in that time.

Wall Street will be looking for positivity from STMicroelectronics as it approaches its next earnings report date. In that report, analysts expect STMicroelectronics to post earnings of $1.05 per share. This would mark year-over-year growth of 105.88%.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.88 per share and revenue of $16.06 billion, which would represent changes of +79.63% and +25.88%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for STMicroelectronics. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. STMicroelectronics is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, STMicroelectronics is holding a Forward P/E ratio of 9.23. For comparison, its industry has an average Forward P/E of 11.35, which means STMicroelectronics is trading at a discount to the group.

Meanwhile, STM's PEG ratio is currently 1.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. STM's industry had an average PEG ratio of 1.87 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 29% 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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