STMicroelectronics N.V. STM is scheduled to report second-quarter 2026 results on July 23, before the opening bell. In the last reported quarter, the company registered an earnings miss of 31.6%.
STM’s Estimates Revisions
The Zacks Consensus Estimate for second-quarter adjusted earnings per share is pegged at 26 cents. In the past 30 days, earnings estimates for the current quarter have witnessed upward revisions by a penny. In the prior-year quarter, the company reported an adjusted earnings per share of 6 cents. For revenues, the consensus estimate is pinned at $3.45 billion, implying a 24.8% year-over-year increase.
What the Zacks Model Unveils
Our proven model doesn't conclusively predict an earnings beat for STMicroelectronics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: STMicroelectronics has an Earnings ESP of -3.85%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
STMicroelectronics N.V. Price and EPS Surprise
STMicroelectronics N.V. price-eps-surprise | STMicroelectronics N.V. Quote
What’s Shaping STM’s Q2 Results?
STMicroelectronics' second-quarter 2025 revenues are likely to have been supported by improving demand across its major end markets, backed by strong booking trends and normalized channel inventories. The automotive business might have gained from continued momentum in advanced driver-assistance systems, silicon carbide solutions and the integration of the acquired NXP MEMS sensor business. At the same time, improving industrial activity, particularly in general-purpose microcontrollers, automation and power applications, is also expected to have contributed to sales growth.
AI-driven infrastructure investments are likely to have been another catalyst for the company's top line during the quarter. Strong demand for power semiconductors, analog devices, microcontrollers and optical interconnect solutions used in AI data centers might have boosted revenues. The ramp-up of the PIC100 silicon photonics platform, deeper collaboration with NVIDIA and an expanded commercial engagement with Amazon Web Services are also expected to have provided incremental support during the quarter.
The quarter is also likely to have been aided by higher contributions from engaged customer programs and a broader mix of growth initiatives. Increasing semiconductor content in personal electronics, resilient demand from communication equipment and computer peripherals, and expanding opportunities in low-earth-orbit satellites are likely to have supported sales. In addition, ongoing design wins across robotics, healthcare, building automation and automotive sensors might have further strengthened revenue performance.
On the earnings front, STMicroelectronics is expected to have benefited from a more favorable product mix, particularly from higher-value AI-related products, along with lower unused-capacity charges as factory utilization improved. Better manufacturing loading and a more stable pricing environment are also likely to have supported margins. While restructuring-related manufacturing transition costs and start-up expenses for new production facilities might have remained a drag, these headwinds are likely to have been offset by stronger operating leverage and an improved revenue mix, supporting bottom-line performance.
Price Performance & Valuation
STM’s shares have rallied 89.1% over the past year, significantly outperforming both the industry and the S&P 500. The stock has also outpaced peers such as Texas Instruments Incorporated TXN, which gained 32.4% during the period. However, it lagged Amtech Systems, Inc. ASYS, whose shares surged 265.6%.
Price Performance
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From a valuation perspective, STM is trading at a premium. The company has a forward 12-month price-to-earnings of 29.48X, above the industry average. On the other hand, Texas Instruments and Amtech Systems are trading at 33.94X and 23.64X, respectively.
P/E (F12M)
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Investment Considerations
STMicroelectronics appears well positioned ahead of its earnings release, supported by improving demand across automotive, industrial and AI-related markets, a healthy order environment and multiple long-term growth drivers, including data center infrastructure and silicon photonics. The company's margin profile also seems to be improving as product mix strengthens and factory utilization recovers.
While the stock has delivered a strong run over the past year and trades at a richer valuation than the broader industry, its premium appears justified by improving business fundamentals and favorable long-term growth prospects. Investors may continue to find the stock attractive, although near-term volatility around the earnings announcement cannot be ruled out.
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STMicroelectronics N.V. (STM): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).