STMicroelectronics NV designs, develops, manufactures, and markets various semiconductor integrated circuits and discrete devices worldwide. The company was founded in 1987 and is based in Geneva, Switzerland.
STM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for STMicroelectronics NV with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that STMicroelectronics NV ranked in the 41th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 21.17%. The most interesting components of our discounted cash flow analysis for STMicroelectronics NV ended up being:
The business' balance sheet suggests that 9% of the company's capital is sourced from debt; this is greater than only 19.75% of the free cash flow producing stocks we're observing.
STMicroelectronics NV's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -1,187. This coverage rate is greater than that of only 0.33% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 9. This value is greater than 79.18% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as STM, try APH, DIOD, FTV, INTC, and CLGX.
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