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

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STMicroelectronics (STM - Free Report) closed at $48.73 in the latest trading session, marking a +1.99% move from the prior day. This change outpaced the S&P 500's 1.62% gain on the day. Elsewhere, the Dow gained 1.17%, while the tech-heavy Nasdaq added 12.91%.

Prior to today's trading, shares of the chip company had lost 5.24% over the past month. This has was narrower than the Computer and Technology sector's loss of 6.64% and lagged the S&P 500's loss of 4.54% 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 $0.96 per share. This would mark year-over-year growth of 21.52%.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.04 per share and revenue of $17.05 billion, which would represent changes of -3.58% and +5.71%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for STMicroelectronics. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. STMicroelectronics is currently a Zacks Rank #3 (Hold).

In terms of valuation, STMicroelectronics is currently trading at a Forward P/E ratio of 11.82. For comparison, its industry has an average Forward P/E of 23.12, which means STMicroelectronics is trading at a discount to the group.

Meanwhile, STM's PEG ratio is currently 2.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. STM's industry had an average PEG ratio of 2.73 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 199, putting it in the bottom 22% 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.

To follow STM in the coming trading sessions, be sure to utilize Zacks.com.


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