In a world increasingly driven by technology, STMicroelectronics N.V. stands at the forefront of the semiconductor industry, powering innovations that enhance everyday life. Known for its cutting-edge products, from automotive integrated circuits to microcontrollers, STMicroelectronics not only leads in quality and innovation but also shapes the technological landscape across multiple sectors. As we analyze the fundamentals of this influential player, one must consider: does STMicroelectronics’ market valuation still reflect its robust growth potential?
Table of contents
Company Description
STMicroelectronics N.V. is a prominent player in the semiconductor industry, specializing in the design, development, and manufacturing of a wide range of semiconductor products. Founded in 1987 and headquartered in Schiphol, the Netherlands, the company operates globally, serving markets in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. STMicroelectronics is organized into three main segments: Automotive and Discrete Group, Analog, MEMS and Sensors Group, and Microcontrollers and Digital ICs Group, providing diverse offerings from automotive ICs to wireless charging solutions. With a workforce of approximately 49.6K employees, STMicroelectronics is strategically positioned as an innovator in the semiconductor ecosystem, driving advancements in automotive, industrial, and consumer electronics sectors.
Fundamental Analysis
In this section, I will provide a fundamental analysis of STMicroelectronics N.V., covering the income statement, key financial ratios, and the company’s dividend payout policy.
Income Statement
The following table summarizes the income statement of STMicroelectronics N.V. (STM) over the past five years, illustrating key financial metrics to aid in your analysis.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 10.22B | 12.76B | 16.13B | 17.29B | 13.27B |
| Cost of Revenue | 6.43B | 7.44B | 8.49B | 8.99B | 8.05B |
| Operating Expenses | 2.47B | 2.91B | 3.20B | 3.68B | 3.54B |
| Gross Profit | 3.79B | 5.33B | 7.64B | 8.29B | 5.22B |
| EBITDA | 2.24B | 3.42B | 5.72B | 6.38B | 3.72B |
| EBIT | 1.32B | 2.38B | 4.50B | 4.82B | 1.96B |
| Interest Expense | 0.054B | 0.042B | 0.013B | 0.055B | 0.085B |
| Net Income | 1.11B | 2.00B | 3.96B | 4.21B | 1.56B |
| EPS | 1.24 | 2.21 | 4.77 | 4.66 | 1.73 |
| Filing Date | 2021-02-24 | 2022-02-24 | 2023-02-23 | 2024-02-22 | 2025-02-27 |
Interpretation of Income Statement
Over the analyzed period, STM’s revenue showed significant growth from 10.22B in 2020 to a peak of 17.29B in 2023, although it declined to 13.27B in 2024. Net income followed a similar trend, peaking at 4.21B in 2023 before dropping to 1.56B in 2024. This decline can be attributed to a substantial increase in costs, particularly in operating expenses, which reduced margins. In 2024, despite the drop in revenue and net income, gross profit remained stable at 5.22B, indicating a focus on maintaining profitability amidst challenges. The recent year’s performance suggests caution for investors as the company may face headwinds moving forward.
Financial Ratios
The table below summarizes the financial ratios for STMicroelectronics N.V. over the years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 10.82% | 15.67% | 24.55% | 24.36% | 11.73% |
| ROE | 13.09% | 21.72% | 31.20% | 25.17% | 8.92% |
| ROIC | 9.44% | 16.23% | 23.95% | 19.47% | 6.34% |
| P/E | 30.02 | 22.10 | 8.13 | 10.76 | 14.43 |
| P/B | 3.93 | 4.80 | 2.54 | 2.71 | 1.29 |
| Current Ratio | 2.49 | 2.66 | 2.56 | 3.17 | 3.11 |
| Quick Ratio | 1.89 | 1.99 | 1.89 | 2.44 | 2.37 |
| D/E | 0.33 | 0.30 | 0.23 | 0.19 | 0.13 |
| Debt-to-Assets | 19.49% | 17.64% | 14.56% | 12.98% | 12.80% |
| Interest Coverage | 24.50 | 57.60 | 341.46 | 83.84 | 19.72 |
| Asset Turnover | 0.71 | 0.82 | 0.81 | 0.71 | – |
| Fixed Asset Turnover | 2.22 | 2.25 | 1.97 | 1.64 | – |
| Dividend Yield | 0.51% | 0.46% | 0.66% | 0.49% | 1.28% |
Interpretation of Financial Ratios
Analyzing STMicroelectronics N.V. (STM) financial health reveals a robust performance across various ratios. The liquidity ratios are strong, with a current ratio of 3.11 and a quick ratio of 2.37, indicating excellent short-term financial stability. The solvency ratio stands at 0.47, suggesting manageable debt levels, although it does raise some concerns regarding financial leverage. Profitability ratios are impressive, notably a net profit margin of 11.73% and an EBIT margin of 20.43%, reflecting strong operational efficiency. However, the debt-to-equity ratio of 0.18 indicates a reliance on debt financing, which may pose risks in adverse market conditions. Overall, while STM shows solid financial fundamentals, caution is warranted due to its leverage.
Evolution of Financial Ratios
Over the past five years, STM has demonstrated a positive trend in profitability and liquidity ratios. The current ratio has consistently remained above 2, while net profit margins have fluctuated but generally improved, indicating a strengthening operational performance and financial stability.
Distribution Policy
STMicroelectronics N.V. (STM) currently pays dividends, with a payout ratio of approximately 18.5% and an annual dividend yield of about 1.28%. Over the past years, the dividend per share has shown a steady increase, indicating a commitment to returning value to shareholders. The company also engages in share buyback programs, which can enhance shareholder value but may carry risks if funded through excessive debt. Overall, the distribution strategy appears to support sustainable long-term value creation for shareholders.
Sector Analysis
STMicroelectronics N.V. is a leading player in the semiconductor industry, known for its diverse product offerings and strong presence across multiple markets, including automotive and industrial applications.
Strategic Positioning
STMicroelectronics N.V. (STM) holds a significant position in the semiconductor market with a market cap of approximately $23.2B. Its diverse product range spans automotive integrated circuits, MEMS sensors, and microcontrollers, catering to high-demand sectors like automotive and industrial applications. Facing competitive pressure from major players, STM leverages innovative technologies to stay ahead. However, the industry is experiencing rapid technological disruptions, necessitating continuous adaptation and investment in R&D to maintain its competitive edge. As an investor, I recognize the importance of monitoring these dynamics to assess STM’s long-term viability.
Revenue by Segment
The following chart illustrates the revenue distribution by segment for STMicroelectronics N.V. for the fiscal year ending December 31, 2024.
In 2024, STMicroelectronics displayed a notable shift in revenue sources. The Product segment generated $13.2B, marking a decline from the previous year’s $17.2B, indicating a potential saturation in this area. Meanwhile, the “Product and Service, Other” segment saw modest growth, reaching $52M, up from $47M in 2023. The Service segment also experienced slight growth, totaling $196M. The overall trend indicates that while established segments face challenges, emerging areas may be gaining traction. However, the significant drop in the Product segment raises concerns about future profitability and market competitiveness.
Key Products
Below is a table showcasing some of the key products offered by STMicroelectronics N.V. This overview highlights the diverse range of semiconductor solutions that cater to various industries.
| Product | Description |
|---|---|
| Automotive Integrated Circuits | Specialized ICs designed for automotive applications, enhancing vehicle safety and efficiency. |
| MEMS Sensors | Micro-electro-mechanical systems that provide various sensing capabilities for industrial and consumer applications. |
| General Purpose Microcontrollers | Versatile microcontrollers used in a wide range of electronic devices, enabling smart functionalities. |
| Wireless Charging Solutions | Technology facilitating efficient power transfer without physical connectors, ideal for consumer electronics. |
| Analog ICs | Integrated circuits designed for analog signal processing, utilized in numerous electronic applications. |
| GaN Power Transistors | Advanced transistors that offer high efficiency and performance for power management in various applications. |
| Touch Screen Controllers | Solutions that enable touch functionality in electronic devices, enhancing user interaction. |
| Optical Sensing Solutions | Products designed for light detection and measurement, utilized in industrial and consumer electronics. |
STMicroelectronics continues to innovate in the semiconductor industry, offering products that cater to evolving market demands across automotive, industrial, and consumer electronics sectors.
Main Competitors
The competitive landscape for STMicroelectronics N.V. in the semiconductor industry includes several significant players, each with considerable market capitalizations.
| Company | Market Cap |
|---|---|
| Jabil Inc. | 23.51B |
| STMicroelectronics N.V. | 23.20B |
| VeriSign, Inc. | 23.13B |
| Flex Ltd. | 23.08B |
| ON Semiconductor Corporation | 22.39B |
| GLOBALFOUNDRIES Inc. | 21.57B |
| SS&C Technologies Holdings, Inc. | 21.56B |
| Check Point Software Technologies Ltd. | 20.79B |
| PTC Inc. | 20.79B |
| United Microelectronics Corporation | 20.00B |
| CDW Corporation | 19.04B |
STMicroelectronics operates in a highly competitive global market, contending with established firms such as Jabil Inc. and VeriSign, among others. Each of these companies plays a vital role in the semiconductor sector, impacting both regional and global markets.
Competitive Advantages
STMicroelectronics N.V. (STM) holds a strong position in the semiconductor industry due to its diverse product offerings across key segments such as automotive, industrial, and consumer electronics. The company is well-positioned to capitalize on the growing demand for electric vehicles and smart devices, with innovative solutions like MasterGaN and advanced MEMS sensors. Looking ahead, STM’s focus on expanding into emerging markets and developing cutting-edge technologies presents significant growth opportunities. By leveraging its robust R&D capabilities and strategic partnerships, I believe STM can continue to enhance its competitive edge in the rapidly evolving semiconductor landscape.
SWOT Analysis
This SWOT analysis aims to identify STMicroelectronics N.V.’s strengths, weaknesses, opportunities, and threats to inform strategic decisions.
Strengths
- Strong market position in semiconductors
- Diverse product offerings
- Robust R&D capabilities
Weaknesses
- High dependence on the automotive sector
- Market volatility
- Limited presence in emerging markets
Opportunities
- Growth in electric vehicle market
- Increasing demand for IoT devices
- Expansion into new geographic regions
Threats
- Intense competition
- Supply chain disruptions
- Regulatory challenges
Overall, STMicroelectronics N.V. has a solid foundation and opportunities for growth, particularly in expanding markets. However, the company must navigate challenges and market fluctuations to maintain its competitive edge and capitalize on emerging trends.
Stock Analysis
In this analysis, I will provide insights into STMicroelectronics N.V. (STM) stock price dynamics, highlighting key movements and trading trends observed over the past year.
Trend Analysis
Over the past year, STM’s stock has experienced a significant decline, with a percentage change of -40.31%. This clearly indicates a bearish trend in the stock’s performance. The stock has faced acceleration in its downward trajectory, as evidenced by a recent decline of -6.47% from September 21, 2025, to December 7, 2025. Notably, the highest price reached during this period was 47.17, while the lowest was 18.49. The standard deviation of 7.9 reflects notable volatility in the stock price.
Volume Analysis
In the last three months, the overall trading volume for STM reached approximately 3B shares, with seller volume at 1.55B and buyer volume at 1.44B, indicating a buyer percentage of 47.94%. The volume trend has been increasing, albeit with a slight dominance of selling activity, as seen in the recent period where seller volume exceeded buyer volume. This suggests a cautious investor sentiment, with market participants leaning towards selling rather than buying, contributing to the bearish trend observed in the stock.
Analyst Opinions
Recent analyst recommendations for STMicroelectronics N.V. (STM) indicate a consensus “buy” for the current year. Analysts have highlighted the company’s strong fundamentals, particularly its solid discounted cash flow score and return on assets. Rating agency analysts have given STM an overall score of 4, with an A- rating, reflecting confidence in its growth potential. The main arguments focus on its robust market position and favorable debt-to-equity ratio, despite some concerns about its price-to-earnings ratio.
Stock Grades
STMicroelectronics N.V. (STM) has received a series of stock grades from reputable grading companies, reflecting a stable outlook in the market.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| TD Cowen | Maintain | Buy | 2025-10-24 |
| Susquehanna | Maintain | Positive | 2025-10-22 |
| Susquehanna | Maintain | Positive | 2025-07-25 |
| Susquehanna | Maintain | Positive | 2025-07-22 |
| Baird | Upgrade | Outperform | 2025-07-22 |
| Jefferies | Upgrade | Buy | 2025-02-19 |
| Bernstein | Downgrade | Market Perform | 2025-02-05 |
| Susquehanna | Maintain | Positive | 2025-01-31 |
| Barclays | Downgrade | Underweight | 2025-01-22 |
| JP Morgan | Downgrade | Neutral | 2024-12-09 |
Overall, the grades indicate a trend of stability with a mix of upgrades and downgrades. The consistent “Positive” ratings from Susquehanna suggest a favorable sentiment, while the recent downgrades from other firms warrant a cautious approach for potential investors.
Target Prices
The consensus target prices for STMicroelectronics N.V. (STM) indicate a range of expectations among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 45 | 22 | 33.38 |
Overall, analysts expect STMicroelectronics to see a target price around 33.38, reflecting a balanced outlook between the high and low estimates.
Consumer Opinions
Consumer sentiment about STMicroelectronics N.V. (STM) is a mixed bag, reflecting both enthusiasm for its innovative products and concerns over customer service experiences.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent product quality and reliability.” | “Customer service response times are slow.” |
| “Innovative technology that meets my needs.” | “Prices are higher compared to competitors.” |
| “Great performance in various applications.” | “Documentation can be lacking and unclear.” |
Overall, consumer feedback reveals a strong appreciation for STMicroelectronics’ product quality and innovation, while recurring concerns focus on customer service and pricing competitiveness.
Risk Analysis
In evaluating STMicroelectronics N.V. (STM), it’s essential to consider the following risks that could affect investment decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in semiconductor demand and prices. | High | High |
| Supply Chain Disruptions | Interruptions in global supply chains affecting production. | Medium | High |
| Regulatory Changes | Changes in trade policies or regulations impacting operations. | Medium | Medium |
| Technological Obsolescence | Rapid advancements may render current products less competitive. | High | Medium |
| Geopolitical Risks | Tensions may impact trade and operations, especially in key markets. | Medium | High |
The most likely and impactful risks for STM revolve around market volatility and supply chain disruptions, especially given the semiconductor industry’s recent challenges with global shortages and fluctuating demand.
Should You Buy STMicroelectronics N.V.?
STMicroelectronics N.V. (STM) has demonstrated strong profitability with a net income of 1.56B in 2024, reflecting a positive net profit margin of 11.73%. The company appears to be creating value as the return on invested capital (ROIC) of 6.34% exceeds the weighted average cost of capital (WACC) of 8.75%, indicating effective capital utilization despite a total debt of 3.17B, which is manageable given its debt-to-equity ratio of 0.181. The overall rating of A- suggests solid fundamentals and a strong position in its industry.
Favorable signals
In the evaluation of STMicroelectronics N.V., I found several favorable elements. The company demonstrates a positive gross margin of 39.34%, indicating effective cost management. Additionally, the ebit margin stands at 14.79%, suggesting strong operational efficiency. The net margin is also favorable at 11.73%, reflecting profitability. Furthermore, the price-to-earnings ratio of 14.43 and price-to-book ratio of 1.29 are favorable, suggesting the stock is reasonably priced. The company maintains a favorable quick ratio of 2.37 and a low debt-to-equity ratio of 0.18, which indicates solid financial health.
Unfavorable signals
Despite the favorable elements, there are also several unfavorable signals present. The revenue growth is notably negative at -23.24%, suggesting declining sales. Additionally, gross profit growth has decreased by -37.01%, and ebit growth has fallen sharply by -59.26%. The net margin growth is also negative at -51.83%, and earnings per share (EPS) growth has dropped significantly by -62.78%. Moreover, the return on equity (ROE) is unfavorable at 8.92%, and the current ratio of 3.11 is viewed unfavorably, indicating potential liquidity concerns.
Conclusion
Considering the overall unfavorable opinion from the income statement evaluation and the favorable opinion from the ratios evaluation, it may appear that the company has potential but faces significant challenges. The bearish trend in the stock price, alongside recent seller volume exceeding buyer volume, suggests it might be prudent to wait for buyers to return before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- American Century Companies Inc. Sells 168,874 Shares of STMicroelectronics N.V. $STM – MarketBeat (Dec 05, 2025)
- STMicroelectronics NV (STM) Q3 2025 Earnings Call Highlights: Strong Revenue Growth Amidst … – Yahoo Finance (Oct 23, 2025)
- STMicroelectronics (NYSE: STM) CFO to present at Barclays 23rd Global Technology Conference Dec. 11 – Stock Titan (Dec 04, 2025)
- STMicroelectronics in spotlight as it unveils industry first microcontroller, AI tools (STM:NYSE) – Seeking Alpha (Nov 18, 2025)
- STMicroelectronics Reports 2025 Third Quarter Financial Results – ST News – STMicroelectronics (Oct 23, 2025)
For more information about STMicroelectronics N.V., please visit the official website: st.com
