STMicroelectronics N.V.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
STM is a buy at $45.78 as of 20 Oct following a roughly 20% pullback from early-October levels that has reset the technical setup from overbought to oversold (RSI 33.5) while the fundamental cyclical recovery remains intact.
Q2 2026 revenue grew 24.4% YoY to $3.49B with EPS of $0.24 versus a loss of $0.11 in the year-ago quarter, and the company beat Q2 EPS estimates by 19.2%. Although FY2025 operating margin remains depressed at 2.7% versus 26.7% in FY2023, the P/S ratio of 3.03x sits 62% below the peer median of 8.04x and EV/EBITDA of 18.4x is 33% below the peer median, suggesting the sell-off has overdiscounted the cyclical trough. With Q3 2026 earnings scheduled for October 29, an active share repurchase program, and declining capex ($2.2B in FY2025 versus $3.2B in FY2024) that should help free cash flow inflect, the risk/reward is asymmetric to the upside from oversold levels.
What could go wrong
- Margin recovery stalls. FY2025 operating margin of 2.7% and gross margin of 33.9% are far below FY2023 levels of 26.7% and 47.9% respectively; if quarterly margin improvement does not accelerate, the stock could remain range-bound on depressed earnings.
- Q3 2026 earnings disappointment. Q1 2026 EPS missed estimates by 31.6% (actual $0.13 vs estimated $0.19), showing execution is uneven; a weak Q3 print on October 29 could extend the technical downtrend below the 200-day MA of $49.38.
- Free cash flow remains negative. FY2025 FCF was -$52M and FY2024 FCF was -$216M; despite declining capex, if working capital or revenue mix does not cooperate, FCF may not turn positive in 2026 as the market expects.
- Automotive/industrial end-market weakness. STM's core exposure to automotive and industrial semiconductors makes it vulnerable to any slowdown in those cycles, which could delay the recovery in bookings and book-to-bill that bulls are counting on for 2027 visibility.
What would change my mind
Where this comes from: Q2 2026 results · Q2 2025 results · earnings vs estimates, 23 Jul · FY23 and FY25 fundamentals. Orin's read on STM; not advice.
How has the share price moved?
Up 91.1% over twelve months, from $25.47 on 27 Oct 2025 to $48.68 at the Tue 27 Oct 2026 close. Its highest close in that time was $79.91 on 22 Jun 2026; the last close is 39.1% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 32.2M, on 23 Jul 2026).
On file
All STM filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $490.5M | 0.0% |
| Morgan Stanley | $478.6M | 0.0% |
| Goldman Sachs Group | $385.7M | 0.0% |
| Invesco | $355.4M | 0.0% |
| Citadel Advisors | $288.5M | 0.0% |
| Point72 Asset Management | $232.5M | 0.3% |
| Duquesne Family Office | $232.4M | 4.5% |
| JPMorgan Chase | $229.5M | 0.0% |
| Bank of America | $199.4M | 0.0% |
| Holocene Advisors | $186.9M | 0.4% |
74 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Ask Orin about STM
Orin answers questions about STM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 91.8× its last 12 months of profit (Tue 27 Oct close); the typical Technology company on the NYSE is at 39.5×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 91.8× | — | 39.5× |
| P/S | 3.17×above usual | 2.00× | — |
| EV/EBITDA | 19.2×above usual | 6.8× | — |
| P/B | 2.4×near usual | 2.5× | — |
- P/E: no usual level — it ran from 7.5× to 137× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $75.50 (from $60 to $100) — 55% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$75.50
$60 – $100 · +55% against the last close
- 3 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 91.8× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 50.2×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| STMSTMicroelectronics N.V. | $43B | 91.8× | 19.2× | 34.3% | 3.5% | 3% |
| ADIAnalog Devices, Inc. | $206B | 50.2× | 30.3× | 65.8% | 29.8% | 12% |
| MCHPMicrochip Technology Incorporated | $35B | 101× | 21.3× | 62.7% | 14.0% | 12% |
| ONON Semiconductor Corporation | $31B | 49.8× | 20.5× | 37.4% | 10.2% | 8% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 91.8× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now91.8×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NYSE were priced at a typical 39.5× their yearly profit (Tue 27 Oct close).
- Now39.5×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $6 a share — 87% below the $48.44 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $6 | 87% below $48.44 |
| Levered | $7 | 86% below $48.44 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.