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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 was negatively impacted by weak automotive sales, which led to a lower-than-expected Q4 forecast. The company's net profit margin decreased to 4.6%, a significant drop from 16.1% in the previous year. However, the company has seen some positive developments, including a physical Power Purchase Agreement with TSE to supply renewable electricity to its French sites. Additionally, STMicroelectronics has been actively buying back its shares, with several announcements regarding its common share repurchase program. The company's Q3 financial results showed net revenues of $3.19 billion and a gross margin of 33.2%.

1.c. Company Highlights

2. STMicroelectronics Delivers Mixed Q3 2025 Results Amidst Challenging Market Conditions

STMicroelectronics reported Q3 2025 revenues of $3.19 billion, slightly above the midpoint of their business outlook range. Gross margin was 33.2%, slightly below the midpoint, while diluted earnings per share, excluding impairments and other related phase-out costs, was $0.29. The actual EPS came out at $0.2239, below estimates of $0.2352. The company generated a positive $130 million free cash flow and worked down inventories. Revenues were driven by growth in Personal Electronics, while Automotive and Industrial performed as anticipated.

Publication Date: Oct -24

📋 Highlights
  • Q3 Revenue Exceeds Outlook Midpoint:: STMicroelectronics reported $3.19 billion, $17 million above the midpoint of its business outlook range.
  • Personal Electronics Surpasses Expectations:: Revenues surged 40% sequentially, driven by seasonality and silicon campaigns.
  • Gross Margin Slightly Below Guidance:: Q3 gross margin was 33.2%, below the midpoint of its outlook range, but expects 35% in Q4 2025.
  • Strong Free Cash Flow and CapEx Cut:: Generated $130 million positive free cash flow and reduced 2025 CapEx to under $2 billion.
  • 2026 Pricing and Margin Outlook:: Anticipates low to mid-single-digit pricing decline and margin pressures from capacity reservation fee reductions and FX headwinds.

Segmental Performance

In Q3, Automotive revenues grew 10% sequentially, driven by all regions except Americas, with a book-to-bill above 1. Industrial revenues increased 8% sequentially and 13% year-over-year, back to year-over-year growth. Personal Electronics revenues were above expectations, up 40% sequentially, reflecting seasonality and increased silicon campaigns. The Industrial segment's book-to-bill ratio returned to parity, with growth in power energy and softness in factory automation.

Outlook and Guidance

The company expects Q4 2025 revenues of $3.28 billion, an increase of 2.9% sequentially, with a gross margin of about 35%. For the full year 2025, revenues are expected to be about $11.75 billion, with a gross margin of about 33.8%. The company has reduced its net CapEx plan to slightly below $2 billion for full year 2025. Analysts estimate next year revenues growth at 11.9%.

Gross Margin Sustainability

Lorenzo Grandi mentioned that the main positive driver in Q4 is improved manufacturing efficiency, but there are negative effects to consider in the first half of 2026, such as reduction of capacity reservation fees and seasonality in revenues. The company expects a low single-digit to mid-single-digit decline in pricing in 2026. The 30-40 basis points of manufacturing inefficiency costs will persist until the end of the 200-millimeter to 300-millimeter transition journey.

Valuation Metrics

With a P/E Ratio of 33.95 and an EV/EBITDA of 9.32, the stock appears to be priced with high expectations for future growth. The ROE of 3.69% and ROIC of 2.27% indicate that the company is generating returns, albeit modest, on equity and invested capital. The Net Debt / EBITDA ratio of 0.53 suggests a manageable debt burden.

3. NewsRoom

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Financial Services Roundup: Market Talk

Dec -04

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Is STMicroelectronics Now an Opportunity After Its Recent Share Price Rebound?

Dec -04

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Tracking the Changing Narrative for STMicroelectronics After Analyst Target Resets and New Initiatives

Dec -04

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Financial Services Roundup: Market Talk

Dec -04

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Lorenzo Grandi, STMicroelectronics’ President and CFO to speak at Barclays investor conference

Dec -04

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Auto & Transport Roundup: Market Talk

Dec -03

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NVIDIA Soars 27% in Six Months: Is the Stock Still Worth Buying?

Dec -02

Source: zacks.com

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STMicroelectronics announces status of common share repurchase program

Dec -01

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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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STMicroelectronics

A-Score: 3.6/10

Value: 5.6

Growth: 5.3

Quality: 4.6

Yield: 1.2

Momentum: 3.5

Volatility: 1.7

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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

22.4$

Current Price

22.41$

Potential

-0.00%

Expected Cash-Flows