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STMicroelectronics (ENXTPA:STMPA) stock has seen some turbulence lately, moving lower over the past month. Investors are closely watching to determine if recent declines are signaling a new valuation opportunity or if this is just short-term volatility.

See our latest analysis for STMicroelectronics.

After a tough stretch marked by an 18.4% one-month share price decline and a year-to-date return that is still firmly negative, STMicroelectronics finds itself at a crossroads. Momentum has faded compared to last year’s high, and with a 1-year total shareholder return of -17.1% and deeper losses over three and five years, investors are re-evaluating the company’s long-term growth prospects and current valuation amid shifting market dynamics.

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With shares trading well below analyst targets and recent declines weighing on sentiment, the question now is whether STMicroelectronics is offering genuine value for long-term investors, or if the market is simply reflecting cautious expectations for future growth.

The prevailing narrative places STMicroelectronics’ fair value nearly 20% above its latest close, highlighting a gap that has many investors questioning whether the market is undervaluing growth and margin recovery potential. To get a sense of what could trigger a turnaround, consider what is driving these value estimates.

The normalization of distribution channel inventories, with genuine end-market demand driving industrial segment growth rather than just inventory replenishment, points to a healthy demand environment that should reduce unused capacity charges and structurally improve gross margins in coming quarters.

Read the complete narrative.

Think there is more to the story? The narrative’s full valuation hinges on bold profit margin rebounds and revenue growth estimates. Which forecasts tip the scales and make this number credible? Uncover the key projections that could spark a re-rating.

Result: Fair Value of $24.65 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent margin pressures and ongoing competition in key markets could still challenge the bullish case for a strong turnaround at STMicroelectronics.

Find out about the key risks to this STMicroelectronics narrative.

If you have a different perspective, or want to dive into the numbers yourself, you can craft your own narrative in just a few minutes. Do it your way.

A great starting point for your STMicroelectronics research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include STMPA.PA.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Crane NXT (NYSE:CXT) raised its full-year sales growth guidance to 9% to 11% following a solid third-quarter performance. However, management also lowered adjusted EPS projections because of macroeconomic headwinds impacting its payment business.

See our latest analysis for Crane NXT.

The stock’s volatile moves in recent weeks tell the story. After a sharp slide following its Q3 update, Crane NXT’s 1-year total shareholder return now sits at 11.5%, bolstered in part by a resurgence in its security technology business even as near-term profit guidance was trimmed. While the latest results reinforced confidence in long-term growth prospects, investors remain focused on the company’s ability to navigate headwinds in its payment division.

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With the stock now trading at a sizable discount to both analyst targets and its estimated intrinsic value, the question for investors is clear: is this a genuine buying opportunity, or is the market correctly pricing in the risks to future growth?

The most widely followed narrative puts Crane NXT’s fair value at $77.33 per share, while its last close was $62.45. This positions the stock at a notable discount, raising the stakes for those weighing its future upside.

Strategic focus on disciplined M&A, expansion into adjacent segments (e.g., ID verification, digital authentication), and increased recurring service/software revenues diversifies Crane NXT’s portfolio. This positions the company for long-term margin expansion and reduced volatility in earnings.

Read the complete narrative.

Want to know what’s driving this optimism? The narrative hinges on a transformation in Crane NXT’s growth model, where higher margins and future profitability are not just hopes but bold projections. What if the real secret is how quickly their earnings could jump? You’ll want to see which financial leap the narrative foresees.

Result: Fair Value of $77.33 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, the company’s reliance on physical authentication and the integration of acquisitions could challenge margin gains if digital trends accelerate or if execution stumbles.

Find out about the key risks to this Crane NXT narrative.

If you see the story differently or want to dig into the numbers yourself, you can put together your own view of Crane NXT in just a few minutes. Do it your way

A great starting point for your Crane NXT research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include CXT.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Developments in artificial intelligence (AI) over the past few years have caused a paradigm shift in the technological landscape. For example, nine of the top 10 companies measured by market cap have clear ties to this once-in-a-generation technology.

One recent addition to the top 10 list is Taiwan Semiconductor Manufacturing (TSM 0.93%), also known as TSMC. The company boasts the world’s most advanced chip foundry and, as such, produces roughly 90% of the world’s most advanced semiconductors, including those for high-end computing and AI.

This has fueled a resurgence in interest in the once-stodgy chipmaker, as new shareholders have flocked to the stock. In fact, the unprecedented demand for high-end processors and TSMC’s market-leading technology have helped the company add more than $1 trillion in market cap since the dawn of AI in early 2023.

New research from The Motley Fool provides granular detail into how TSMC makes money. Not surprisingly, the lion’s share of the company’s revenue comes from the sale of chips used for high-performance computing (HPC). This includes high-end processors used in data centers and cloud computing to facilitate the training and running of AI models. The segment accounted for 57% of TSMC’s third-quarter sales.

Yet HPC only became the company’s dominant segment in early 2022. Investors might be surprised to learn that, until then, TSMC’s biggest moneymaker was the smartphone segment. In recent years, sales of smartphones have lagged, as a perfect storm of economic conditions encouraged users to hang on to their existing phones a bit longer. Surging inflation began in 2021 and rose to record levels, slowing consumer spending and punishing the smartphone market, then TSMC’s biggest business.

Taiwan Semiconductor Manufacturing

Today’s Change

(-0.93%) $-2.68

Current Price

$286.56

Key Data Points

Market Cap

$1486B

Day’s Range

$277.21 – $287.79

52wk Range

$134.25 – $311.37

Volume

964K

Avg Vol

13M

Gross Margin

58.06%

Dividend Yield

0.01%

The smartphone market has begun to recover, and smartphones overall represented 30% of TSMC’s third-quarter sales. This is thanks in part to the success of Apple‘s iPhone 17. Just last week, the company reported a quarterly revenue record that grew 8% year over year to $102.5 billion. CEO Tim Cook predicted that the December quarter would be the biggest in its history. Apple has historically been one of TSMC’s biggest customers, accounting for 24% of its revenue in 2024. This suggests that TSMC’s legacy smartphone segment has begun to heat up.

Taking a step back helps provide much-needed context. In the third quarter, TSMC generated revenue of $33.1 billion, up 41% year over year and 10% sequentially, while earnings per American depositary receipt (ADR) soared 39% to $2.92.

Despite its multiple growth drivers, TSMC is attractively priced, selling for 30 times trailing-12-month earnings, a discount compared to a multiple of 31 for the S&P 500.

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