STMicroelectronics (STM) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, STMicroelectronics (STM) closed at $49.61, marking a +1.91% move from the previous day. This change outpaced the S&P 500's 0.08% gain on the day. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq lost 4.81%.

Heading into today, shares of the chip company had gained 6.03% over the past month, outpacing the Computer and Technology sector's loss of 2.99% and the S&P 500's gain of 0.64% in that time.

Wall Street will be looking for positivity from STMicroelectronics as it approaches its next earnings report date. This is expected to be January 27, 2022. The company is expected to report EPS of $0.70, up 11.11% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.56 billion, up 9.89% from the year-ago period.

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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 5.19% higher. STMicroelectronics is currently sporting a Zacks Rank of #1 (Strong Buy).

In terms of valuation, STMicroelectronics is currently trading at a Forward P/E ratio of 18.37. For comparison, its industry has an average Forward P/E of 18.29, which means STMicroelectronics is trading at a premium to the group.

It is also worth noting that STM currently has a PEG ratio of 3.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. STM's industry had an average PEG ratio of 2.84 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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