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STMicroelectronics (STM) Declines More Than Market: Some Information for Investors

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STMicroelectronics (STM - Free Report) closed at $44.24 in the latest trading session, marking a -0.34% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.07% for the day.

The chip company's shares have seen a decrease of 8.98% over the last month, not keeping up with the Computer and Technology sector's gain of 2.5% and the S&P 500's gain of 3.98%.

The upcoming earnings release of STMicroelectronics will be of great interest to investors. The company's earnings report is expected on January 25, 2024. In that report, analysts expect STMicroelectronics to post earnings of $0.96 per share. This would mark a year-over-year decline of 27.27%. In the meantime, our current consensus estimate forecasts the revenue to be $4.3 billion, indicating a 2.76% decline compared to the corresponding quarter of the prior year.

Investors might also notice recent changes to analyst estimates for STMicroelectronics. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.29% downward. STMicroelectronics presently features a Zacks Rank of #4 (Sell).

In the context of valuation, STMicroelectronics is at present trading with a Forward P/E ratio of 11.6. For comparison, its industry has an average Forward P/E of 22.79, which means STMicroelectronics is trading at a discount to the group.

Also, we should mention that STM has a PEG ratio of 2.32. 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. The Semiconductor - General industry currently had an average PEG ratio of 3.07 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 230, finds itself in the bottom 9% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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