STM Should I Buy
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Not a good buy right now. Despite bullish longer-term moving averages and bullish options positioning, STM just sold off on an earnings/guidance combo that showed weak profitability (big EPS decline and miss) and a softer near-term outlook (Q1 guide down). With no Intellectia buy signals today and momentum indicators deteriorating, the higher-probability move for an impatient buyer is still unfavorable unless it quickly reclaims the 28.65 pivot and holds above support.
Price/Trend: Regular session -2.55% to ~27.89 (post-market ~28). Structure is mixed: moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but momentum is weakening. Momentum: MACD histogram -0.0981 and negatively expanding = bearish momentum building. RSI(6) ~39.3 = leaning weak/near-oversold but not a clean reversal signal. Levels: Pivot 28.651 is the key reclaim level; price is currently below it. Near support S1 27.315 (break risks move toward S2 26.49). Upside resistances: 29.986 then 30.811. Pattern/Probabilities (provided): next day modest upside bias, but next month expectation is negative (-4.36%), which aligns with weakening momentum.
Intellectia Proprietary Trading Signals:
Hedge funds are buying (reported buying amount up ~2413% QoQ), which is a supportive medium-term signal.
Revenue in Q4 2025 was slightly better than expected (~$3.33B, +0.2% YoY; +4.5% QoQ), showing some stabilization in the top line.
Analyst targets have been nudged up recently by multiple firms (supportive to sentiment).
Earnings quality: Q4 2025 non-GAAP EPS fell ~70% YoY to $0.11 and missed expectations (miss by $0.17), signaling margin/profit pressure.
Guidance: Q1 2026 revenue guide (~$3.04B) implies a sequential step-down.
Automotive underperformance noted in the revenue mix—important given STM’s exposure.
Technical momentum is bearish (MACD weakening) and price is below the 28.65 pivot; downside risk to 27.315/26.49 support zones remains.
Latest reported quarter season in the provided financial snapshot: 2025/Q3. 2025/Q3 trends: Revenue down ~1.97% YoY to 3.187B; Net income down ~32.48% YoY to 237M; EPS down ~29.73% YoY to 0.26; Gross margin down ~12.02% YoY to 33.23. Update from news (2025/Q4): Revenue roughly flat YoY (+0.2%) but profitability deteriorated sharply (non-GAAP EPS down ~70% YoY), reinforcing the view that margins—not demand alone—are the main problem right now.
Recent analyst changes trend: price targets have been raised into 2026, but ratings remain mixed/mostly not aggressive.
