Start here if you're new
what it is
It makes the chips inside cars, factory gear, phones, and other devices.
how it gets paid
Last year Stmicroelect made $11.8B in revenue. Analog, MEMS & Sensors was the main engine at $5.2B, or 44% of sales.
why growth slowed
Revenue fell 11.1% last year. Customers, especially in europe, have shifted production plans between fully electric and hybrid vehicles and witnessed more foreign competition.
what just happened
STM posted $0.11 a share when the street wanted $0.23.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
40/100 earnings predictability — expect surprises
63.3x trailing p/e — you're paying up for this one
1.2% dividend yield — cash in your pocket every quarter
10.0% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
It makes the chips inside cars, factory gear, phones, and other devices.
ST sells thousands of products to more than 100,000 customers. You are not leaning on one buyer or one gadget cycle. Autos were 38% of sales, and that end market fell 24% last year.
How they make money
$11.8B
annual revenue · their business grew -11.1% last year
Analog, MEMS & Sensors
$5.2B
Embedded Processing
$3.5B
Optical and RF Products
$1.7B
Power & Discrete
$1.4B
The products that matter
sensors and analog chips
Analog, MEMS & Sensors
$5.2B · 44% of revenue
This is the largest segment at $5.2B, or 44% of sales. If STM is going to look healthier in reported numbers, you will probably see it here first.
44% of revenue
microcontrollers and processing
Embedded Processing
$3.5B · 30% of revenue
At $3.5B, this is nearly one-third of the company. It gives STM some breadth beyond cars, but not enough to fully cancel a large auto slump on its own.
30% of revenue
imaging and rf chips
Optical and RF Products
$1.7B · 14% of revenue
This $1.7B business matters, but it does not get to dictate the whole valuation. It helps on the margin. It does not erase a weak core market.
14% of revenue
power management chips
Power & Discrete
$1.4B · 12% of revenue
At $1.4B, this is the smallest segment shown here. It still matters because power chips sit close to the same auto and industrial spending cycles moving the stock.
12% of revenue
Key numbers
$11.8B
annual revenue
This is the size of the machine. You are looking at a company that still sells almost $12B a year.
1.5%
operating margin
This is the profit cushion. It is thin enough that a small sales drop matters fast.
63.3x
trailing P/E
You are paying a lot for past earnings. That makes the stock sensitive to any miss.
$28
18-month target
VL sees 16% downside from $33.53. The market is already ahead of that view.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- long-term debt $1.8B (6% of capital)
- net profit margin 13.7% — keeps 14 cents of every dollar in revenue
- return on equity 11% — $0.11 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in STM 3 years ago → it's now worth $7,080.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
STM posted $0.11 a share when the street wanted $0.23.
That was a 52.17% miss. Annual revenue was $11.8B, down 11.1%, and gross margin was 33.9%.
$2.7B
revenue
$0.11
eps
33.9%
gross margin
the number that mattered
The most important number was $0.11 per share. It was 52.17% below the $0.23 estimate, which tells you demand missed the mark.
-
stmicroelectronics’ multi-year deal with amazon web services promises potential billions.stmicro will increase its existing business with amazon to expand a number of product categories, including high-bandwidth mixed signal processing, advanced microcontrollers, and power-efficient integrated circuits. amazon’s willingness to entrust stmicro with advanced computing requirements to support its data center expansion ought to translate into hundreds of millions of orders, though the incremental amount was not divulged.
-
up to 24.8 million warrants in stm stock were issued to aws.these warrants would vest at certain points over a seven-year period with an exercise price of $28.38, depending on the products and services bought by amazon.
-
we have kept our 2026 earnings outlook and initiated a $2.00 estimate for 2027.it looks like the three-year earnings slide may be over, but stmicro faces an uphill climb to grow into its valuation. fourth-quarter results came in slightly above expectations from a revenue and gross margin perspective, and $0.18 of charges masked an otherwise decent quarter.
-
still, the automotive end market (the largest at 38%) experienced a 24% revenue decline last year, and prospects remain muddled.customers, especially in europe, have shifted production plans between fully electric and hybrid vehicles and witnessed more foreign competition.
-
increased design wins signal a turn is possible, but it may be slower than expected.
source: company earnings report, 2026
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What could go wrong
the core risk is simple: STM needs a recovery while 38% of revenue is still tied to an automotive market that already fell 24%.
med
automotive stays weak
Automotive is STM’s largest end market at 38% of sales, and revenue there already fell 24% last year. If customers keep trimming builds, the rebound case moves further out.
A business this exposed cannot hide a prolonged auto slowdown. It would pressure both revenue and operating leverage.
med
the aws deal stays more promise than proof
The multi-year AWS agreement is real, and the 24.8 million warrants show commitment. But no incremental revenue figure was disclosed.
If investors treat this as near-term growth and the revenue ramp stays hard to see, expectations outrun the income statement.
med
valuation rerates lower
STM trades at 63.3x trailing earnings after EPS fell 68% to $0.53. That is a comeback multiple on comeback earnings that have not arrived yet.
When a cyclical stock is priced for recovery, any delay in that recovery hurts the stock faster than it hurts the narrative.
med
european auto mix stays messy
Management flagged production changes between fully electric and hybrid vehicles, along with more foreign competition. That is not a clean demand backdrop.
Shifting product mix can delay design-win monetization even if unit demand eventually comes back.
If automotive stays soft and the AWS ramp remains hard to measure, the path from $11.8B of revenue to the $13B estimate gets a lot tighter.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
automotive demand
Cars are 38% of revenue, and that market fell 24% last year. If this line is still falling next quarter, the recovery thesis is early.
earnings
eps rebuild
EPS dropped from $1.66 to $0.53. You want to see the line move toward the $1.15 estimate, not just hear that the second half should look better.
trend
aws revenue visibility
The deal is real. The revenue contribution is still fuzzy. Watch for management to connect the partnership to actual sales, not just strategic language.
metric
valuation vs. estimates
At 63.3x trailing earnings and roughly 29x the $1.15 estimate, the stock needs numbers to catch up. If estimates slip, the multiple becomes the story.
Analyst rankings
short-term outlook
average
outlook rank 3 — middle of the pack. in human-speak, analysts do not see a clear short-term edge here.
risk profile
average
risk rank 3 — neither unusually safe nor unusually dangerous. You are dealing with a cycle, not a broken balance sheet.
chart momentum
average
momentum rank 3 — the chart is not giving you a loud signal either way.
earnings predictability
40 / 100
Low predictability means results can surprise you. That matters more when the stock already carries a premium multiple.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 105 buyers vs. 133 sellers in 4q2025. total institutional holdings: 85.1M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$12
$44
$34
current price
$28
target midpoint · 16% from current · 3-5yr high: $45 (+35% · 9% ann'l return)
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