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Valued as a cyclical company: P/E comparison.
ACCE opinionSTMicroelectronics N.V. Common Stock (STM)
Fair value (3 models)
Not available
ACCE price target
$62.00
Rating
Not rated
Horizon
12 months
ACCE price target published on 3 Aug 2026, 00:00 CEST.
Price used: $44.02 at the close on 23 Oct 2026, 22:00 CEST.
Models: P/E comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
ACCE score
46
out of 100
Analysts
57% buy
14 covering
P/E
1100.5x
forward 17.4x
1-year return
+74.3%
Dividend yield
0.82%
STMicroelectronics N.V. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
STMicroelectronics designs and manufactures semiconductors across automotive, industrial, and personal electronics end markets, with its silicon carbide (SiC) power devices increasingly the focal point for investors betting on EV powertrain adoption. ST holds a structural position in SiC that competitors like Wolfspeed and Onsemi are scrambling to match - a multi-year design-win cycle means revenue visibility that spot-market chip names simply don't have. The near-term catalyst is ST's ongoing capacity expansion at its Catania, Sicily fab, where the company is targeting $1B+ in SiC revenue for 2024 as Tesla, BYD, and a broadening roster of Tier 1 auto suppliers ramp orders. The tension in this name is real: a 102x trailing PE on a 6.9% operating margin with ROE barely above zero tells you the market is paying for a SiC story that hasn't fully delivered yet, and the 26% revenue growth is decelerating into a softer industrial cycle. At a 40x forward multiple, you need to believe ST executes its SiC ramp without meaningful yield or pricing pressure - that's the single question this name lives or dies on.
⚠ Investor warnings · 4 flagsAI-assisted·How I use AI
high
Earnings collapse
Net income down 33.3% YoY despite 26.1% revenue growth. Margin compression or one-time charges eroding profitability sharply.
high
Valuation disconnect
P/E of 1301.5 is distorted by near-zero earnings; forward P/E 20.5 and EV/EBITDA 16.4 suggest market pricing recovery. Downside risk if earnings don't rebound.
moderate
Long-term revenue decline
5-year revenue CAGR is negative 9.9%. Recent QoQ and YoY growth masks structural headwind; sustainability unclear.
moderate
Weak profitability metrics
ROE of 2.7% and net margin 3.6% are anaemic for a $46.6B semiconductor player. Operating margin 6.9% indicates cost structure stress.
AI research notes
AI-assisted·How I use AIWritten Oct 11, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue surged 26.1% year over year, and earnings beat expectations by 19.2%, signaling strong near-term demand recovery.
Forward P/E of 20.5x trades below the sector median of 29.3x, suggesting the market undervalues the stock relative to peers.
Analyst consensus targets $75.04, implying 44.1% upside, with 57% of analysts rating the stock Buy or Strong Buy.
Why it could disappoint
Five year revenue declined 9.9% annually on average, showing the company has struggled to grow over the long term.
Return on equity of 2.7% and ROIC of 0.7% are far below cost of capital, destroying shareholder value despite revenue growth.
Free cash flow yield of 0.2% on a $52.06 share price is negligible, and the reverse DCF implies only 9.5% perpetual growth.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 29, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where STM's valuation models land
Price
$44.02
Model fair valueConfidence: medium
$51.45
Model
Fair value
Upside
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Quality
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