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STMicroelectronics (STM) Gains But Lags Market: What You Should Know

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STMicroelectronics (STM - Free Report) closed at $32.10 in the latest trading session, marking a +1.07% move from the prior day. This move lagged the S&P 500's daily gain of 1.14%. Meanwhile, the Dow gained 1.12%, and the Nasdaq, a tech-heavy index, added 0.05%.

Wall Street will be looking for positivity from STMicroelectronics as it approaches its next earnings report date. This is expected to be October 27, 2022. The company is expected to report EPS of $1.05, up 105.88% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.88 per share and revenue of $16.06 billion. These totals would mark changes of +79.63% and +25.88%, respectively, from last year.

Any recent changes to analyst estimates for STMicroelectronics should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. STMicroelectronics is currently a Zacks Rank #2 (Buy).

In terms of valuation, STMicroelectronics is currently trading at a Forward P/E ratio of 8.18. Its industry sports an average Forward P/E of 8.89, so we one might conclude that STMicroelectronics is trading at a discount comparatively.

Also, we should mention that STM has a PEG ratio of 1.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. STM's industry had an average PEG ratio of 1.69 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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