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1. Company Snapshot

1.a. Company Description

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific.The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments.The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products.


The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions.The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; radio frequency (RF) and electrically erasable programmable read-only memories; and RF, digital, and mixed-signal ASICs. It also provides assembly and other services.The company sells its products through distributors and retailers, as well as through sales representatives.


It serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets.STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.

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1.b. Last Insights on STMPA

STMicroelectronics' recent performance has been driven by positive developments, including a €1 billion credit line from the European Investment Bank to fund research and high-volume chip production in Italy and France. The company's restructuring efforts, aimed at optimizing its European manufacturing footprint, are underway, with associated costs impacting earnings through 2026. Investors are focused on the upcoming earnings report, which is expected to provide updates on automotive and industrial demand, gross margin trends, and guidance for early 2026. A recent fair value estimate increase to $27.52 per share reflects confidence in execution and preferred chip supply chain exposure.

1.c. Company Highlights

2. STMicroelectronics' FY 2025 Earnings: A Challenging Year with a Positive Outlook

STMicroelectronics reported Q4 2025 revenues of $3.33 billion, above the midpoint of the business outlook range, driven by higher revenues in Personal Electronics and Communication Equipment and Computer Peripheral. The company's gross margin was 35.2%, also above the midpoint of the business outlook range. However, diluted earnings per share was $0.11, impacted by certain negative one-time tax expenses. For the full year 2025, net revenues decreased 11.1% to $11.8 billion, mainly driven by a strong decrease in Automotive and to a lesser extent, in Industrial. Gross margin was 33.9%, down from 39.3% in 2024. Excluding impairment, restructuring charges, and other related phaseout costs, diluted earnings per share was $0.53.

Publication Date: Feb -02

📋 Highlights
  • Q4 2025 Revenue Growth:: Revenues rose to $3.33 billion, exceeding the business outlook midpoint, driven by Personal Electronics and Communication Equipment growth.
  • Full-Year Revenue Decline:: 2025 net revenues fell 11.1% to $11.8 billion, primarily due to 19% decline in Automotive and 3% drop in Industrial sectors.
  • Gross Margin Compression:: Full-year gross margin dropped to 33.9% from 39.3% in 2024, with Q4 at 35.2%, above the midpoint, but Q1 2026 guidance at 33.7% (±200 bps).
  • 2026 Recovery Outlook:: Q1 2026 EBIT guidance at $120–160 million (margin 13–17%), with margin recovery expected in H2 2026 due to reduced unused capacity charges.

Revenue and Margin Performance

The company's revenue decline in 2025 was largely due to the weak automotive and industrial markets. However, the company is confident in its ability to grow organically in 2026, driven by growth drivers in automotive, industrial, Personal Electronics, and data centers. As Jean-Marc Chery, ST President and CEO, stated, "We enter in a better and healthier situation compared to '25." The company's gross margin is expected to improve in 2026, with a mild increase in Q2 and a more significant increase in the second half of the year, driven by seasonality.

Outlook and Guidance

For Q1 2026, ST expects revenues to be $3.04 billion, a decrease of 8.7% sequentially, plus or minus 350 basis points. Gross margin is expected to be about 33.7%, plus or minus 200 basis points, including about 220 basis points of unused capacity charges. The company expects a strong second half of the year, driven by various growth drivers such as AI data center, automotive, and industrial. Analysts estimate next year's revenue growth at 10.3%.

Valuation

With a P/E Ratio of 147.75 and an EV/EBITDA of 10.86, the company's valuation appears to be sensitive to its earnings growth. The company's ROE is 0.97%, and ROIC is 0.7%, indicating a relatively low return on equity and invested capital. The Net Debt / EBITDA ratio is -0.31, indicating a net cash position. Actual EPS came out at $0.09221, relative to estimates at $0.1576, indicating a negative surprise.

Growth Drivers

The company is confident in its growth drivers, including automotive, industrial, Personal Electronics, and data centers. The acquisition of NXP is expected to bring additional revenues in the automotive segment. The company's microcontroller business is growing, and the embedded processing solution segment is expected to grow above 30% year-over-year, driven by strong demand.

3. NewsRoom

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1 Lesser-Known Chip Stock to Snap Up ASAP

Feb -12

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Amazon Chip Deal With STMicro Backs AWS AI Growth And Valuation Story

Feb -10

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STMicroelectronics introduces the first automotive microcontroller with AI acceleration for edge intelligence

Feb -10

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Stocks to Watch Monday Recap: Novo Nordisk, Hims & Hers, Apollo

Feb -09

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AWS deepens STMicro tie with 24.8 million-share warrant deal

Feb -09

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STMicroelectronics Stock Nears Buy Point On Amazon Web Services Deal

Feb -09

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Stocks to Watch Monday: Novo Nordisk, Hims & Hers, Apollo

Feb -09

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Amazon’s US$200b AI Plan And What It Could Mean For Valuation

Feb -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.09%)

6. Segments

Analog, MEMS & Sensors Group (AMS)

Expected Growth: 4.5%

STMicroelectronics N.V. is expected to grow driven by increasing demand for microchips in electric vehicles, growing adoption of IoT devices, and rising need for advanced semiconductor solutions.

Microcontrollers (MCU)

Expected Growth: 8.2%

Growing demand for autonomous vehicles, Industry 4.0, and smart homes drive the need for advanced IoT and industrial microcontrollers, while increasing electrification in automotive boosts demand for STMicroelectronics' microcontrollers.

Power and Discrete Products (p&d)

Expected Growth: 4.7%

Growing demand for electric vehicles, renewable energy systems, and industrial automation drives growth, fueled by increasing focus on energy efficiency and electrification.

Digital ICs and RF Products(D&RF)

Expected Growth: 8.5%

Growing demand for 5G and IoT devices drive the growth of Digital ICs and RF Products, enabling STMicroelectronics N.V. to capitalize on its broad range of semiconductor solutions for wireless and wired communications.

Others

Expected Growth: 7.8%

STMicroelectronics N.V. is expected to grow due to increasing demand for microcontrollers and sensors in the automotive and IoT industries, as well as its strong focus on research and development.

7. Detailed Products

Microcontrollers

STMicroelectronics' microcontrollers are designed for a wide range of applications, including industrial, automotive, and consumer electronics.

Imaging and Photonics

STMicroelectronics' imaging and photonics products include image sensors, laser diodes, and optical sensors for various applications.

Power Management

STMicroelectronics' power management products include voltage regulators, power amplifiers, and battery management systems.

Analog and Interface

STMicroelectronics' analog and interface products include data converters, audio codecs, and interface ICs.

Microperipherals

STMicroelectronics' microperipherals include touch controllers, fingerprint sensors, and other human-machine interface devices.

Automotive Products

STMicroelectronics' automotive products include microcontrollers, power management, and sensor products for automotive applications.

Internet of Things (IoT) Products

STMicroelectronics' IoT products include microcontrollers, sensors, and connectivity solutions for IoT applications.

Memory and Secure MCUs

STMicroelectronics' memory and secure MCUs include secure microcontrollers, flash memory, and EEPROM products.

8. STMicroelectronics N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for STMicroelectronics N.V. is medium due to the availability of alternative semiconductor products from other companies.

Bargaining Power Of Customers

The bargaining power of customers for STMicroelectronics N.V. is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for STMicroelectronics N.V. is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for STMicroelectronics N.V. is low due to the high barriers to entry in the semiconductor industry, including significant capital requirements and technological expertise.

Intensity Of Rivalry

The intensity of rivalry for STMicroelectronics N.V. is high due to the competitive nature of the semiconductor industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 15.94%
Debt Cost 3.95%
Equity Weight 84.06%
Equity Cost 10.79%
WACC 9.70%
Leverage 18.97%

11. Quality Control: STMicroelectronics N.V. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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QUALCOMM

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Growth: 5.9

Quality: 7.4

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

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ASML Holding

A-Score: 4.8/10

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Growth: 8.0

Quality: 8.5

Yield: 1.2

Momentum: 7.5

Volatility: 3.0

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ASM International

A-Score: 4.2/10

Value: 1.3

Growth: 8.2

Quality: 8.4

Yield: 1.2

Momentum: 4.0

Volatility: 2.0

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NXP Semiconductors

A-Score: 3.8/10

Value: 1.6

Growth: 6.2

Quality: 7.0

Yield: 3.1

Momentum: 2.5

Volatility: 2.7

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Infineon Technologies

A-Score: 3.6/10

Value: 2.3

Growth: 4.9

Quality: 4.7

Yield: 1.2

Momentum: 5.0

Volatility: 3.3

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STMicroelectronics

A-Score: 3.6/10

Value: 5.4

Growth: 5.2

Quality: 4.7

Yield: 1.9

Momentum: 2.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.44$

Current Price

28.45$

Potential

-0.00%

Expected Cash-Flows