STMicroelectronics (STM) closed at $37.11 in the latest trading session, marking a -0.72% move from the prior day. This change was narrower than the S&P 500’s daily loss of 1.11%. Meanwhile, the Dow lost 0.85%, and the Nasdaq, a tech-heavy index, added 0.15%.
Heading into today, shares of the chip company had lost 2.48% over the past month, outpacing the Computer and Technology sector’s loss of 4.59% and lagging the S&P 500’s loss of 2.19% in that time.
Investors will be hoping for strength from STMicroelectronics as it approaches its next earnings release. On that day, STMicroelectronics is projected to report earnings of $1.13 per share, which would represent year-over-year growth of 37.8%. Meanwhile, our latest consensus estimate is calling for revenue of $4.44 billion, up 24.73% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4 per share and revenue of $16.12 billion. These totals would mark changes of +85.19% and +26.33%, 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. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. STMicroelectronics is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, STMicroelectronics is holding a Forward P/E ratio of 9.35. Its industry sports an average Forward P/E of 13.89, so we one might conclude that STMicroelectronics is trading at a discount comparatively.
It is also worth noting that STM currently has a PEG ratio of 1.87. 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. The Semiconductor – General was holding an average PEG ratio of 1.92 at yesterday’s closing price.
The Semiconductor – General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 99, which puts it in the top 40% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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