STMicroelectronics Q4 Results Exceed Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Source: seekingalpha
- Revenue Growth: STMicroelectronics reported a 0.2% year-over-year increase in Q4 2025 net revenues to $3.33 billion, surpassing estimates, driven by strong demand in Personal Electronics, indicating a recovery in performance.
- Profitability Decline: Despite revenue growth, non-U.S. GAAP EPS fell 70.3% year-over-year to $0.11, reflecting significant impacts from restructuring and impairment costs, which may affect investor confidence.
- Mixed Product Performance: The Analog, MEMS, and Sensors segment saw a 7.5% year-over-year revenue increase to $1.45 billion, primarily due to imaging technology, while the Power and Discrete segment declined 31.6% to $412 million, highlighting uneven market demand.
- Outlook: STMicroelectronics expects Q1 2026 net revenues to be around $3.04 billion, an 8.7% sequential decline but above the consensus estimate of $2.93 billion, with a projected gross margin of 33.7%, reflecting cautious optimism for the future.
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Analyst Views on STM
Wall Street analysts forecast STM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for STM is 33.25 USD with a low forecast of 25.00 USD and a high forecast of 45.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
2 Buy
5 Hold
0 Sell
Moderate Buy
Current: 30.330
Low
25.00
Averages
33.25
High
45.00
Current: 30.330
Low
25.00
Averages
33.25
High
45.00
About STM
STMicroelectronics N.V. is a Netherlands-based semiconductor company. It designs, develops, manufactures and markets a range of products, including discrete and standard commodity components, and application-specific integrated circuits (ASICs) for analog, digital and mixed-signal applications. The Company's segments include Automotive and Discrete Group (ADG), Analog, MEMS and Sensors Group (AMS), and Microcontrollers and Digital ICs Group (MDG). The ADG segment comprises all dedicated automotive Integrated Circuits (ICs), and discrete and power transistor products. The AMS segment includes low-power analog ICs for all markets, smart power products; Touch Screen Controllers, Low Power Connectivity solutions for Internet of Things (IoT), and power conversion products, among others. The AMS segment comprises general purpose and secure microcontrollers, and Electrically Erasable Programmable Read-Only Memory memories.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
STMicroelectronics Q4 2025 Earnings Call Insights
- Revenue Growth: STMicroelectronics reported Q4 2025 revenues of $3.33 billion, exceeding expectations, primarily driven by Personal Electronics and Communication Equipment, while Automotive underperformed, indicating a divergence in market demand.
- Gross Margin Performance: The gross margin stood at 35.2%, above expectations, attributed to a better product mix, although it decreased by 250 basis points year-over-year, reflecting challenges from lower manufacturing efficiencies and currency effects.
- Future Outlook: Management anticipates Q1 2026 revenues to drop to $3.04 billion, an 8.7% sequential decline, yet maintains optimism for overall growth in 2026, particularly in data centers and automotive sectors.
- Cash Flow and Investment: The company generated $265 million in free cash flow for 2025, demonstrating positive progress in inventory normalization and operational efficiency, while planning to invest $2.2 billion in 2026 to support capacity expansion.
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STMicroelectronics Reports Mixed Q4 2025 Financial Results
- Revenue Performance: STMicroelectronics reported Q4 2025 net revenues of $3.329 billion, reflecting a 0.2% year-over-year growth that surpassed analyst expectations of $3.298 billion, demonstrating resilience in a challenging market environment.
- Profitability Pressure: Adjusted earnings per share were 11 cents, significantly trailing the analyst consensus estimate of 25 cents, while gross margin stood at 35.2%, exceeding the midpoint of guidance but declining 250 basis points year-over-year, indicating impacts from reduced manufacturing efficiencies and adverse currency movements.
- Segment Performance Discrepancies: The Analog Products, MEMS, and Sensors segment saw a revenue increase of 7.5% to $1.45 billion, while the Power and Discrete products segment experienced a sharp decline of 31.6% to $412 million, highlighting the complexity and unevenness of market demand.
- Future Outlook: The CEO characterized 2026 as a transition year with plans to invest between $2.0 billion and $2.2 billion to support future growth, expressing optimism for organic growth, particularly as inventory issues are expected to be resolved.
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