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Micron Technology (MU): upside ahead?

1:48 pm ET, 17 May 2018

Micron Technology (NASDAQ: MU) is down almost 3% in today's trading.  Is today a good buying opportunity?  Let us look at the fundamentals.  

Micron is a significant supplier and manufacturer of memory and storage used electronic devices ranging from personal computers to smartphones. The firm had a market share of 20% of total memory/storage shipments. 

In 2017, DRAM accounted for roughly 64% of total revenue, with NAND making up the remainder. 

Micron operates in the highly competitive space, so its long-term profitability is limited.

There is little or no product differentiation in memory storage, with average selling prices normally tracking downward over time. This ultimately leads to major price competition between the industry leader Samsung and second-tier companies such as Micron and Hynix. Smaller competitors tend to establish joint ventures in an attempt to come up with superior memory solutions. 

Through the partnership with Intel, Micron has developed next-generation 3D NAND as well as the upcoming 3D XPoint technology, which will allow the company to weather economic and cyclical downturns.

Per Finstead research, out of 31 analysts covering the stock, 25 rate it a strong buy.  

The Micron stock price target upside is 8.59% (type "MU upside" on Finstead). 

Micron Technology (MU): Where Does The Stock Price Go Now?

5:50 pm ET, 22 Mar 2018

Micron Technology (NASDAQ: MU) shares fell in the extended session today after the company surpassed analyst estimates following a weeks-long run-up on the stock, but gave a disappointing forecast.  

Micron shares declined more than 6% after hours, trading at $57.30.

Its shares have climbed 40% in the past month, because of the increasing demand for its products from various sources.

What's important to note in this case is that an earnings beat doesn't necessarily imply a surge in the stock price. The Company's guidance is a strong factor that influences the stock price. For example, a forward-looking guidance was sparked in the tech sector after the introduction of the U.S. tax reform bill, during the Q4 earnings.

So what’s the path for Micron's stock now? 

Per Finstead Research, Micron Technology’s average price target is $60 (visit Finstead and type "MU price target").

However, Micron Technology’s valuation is quite low compared to its peers, judging by forward P/E ratio.

There is some potential for the stock to bounce back, but it’s hard to say when and how this may occur.

Lam Research (LRCX): Can The Stock Price Run Sustain?

2:18 pm ET, 22 Mar 2018

LRCX is down 3% today, but it witnessed a 19% stock price hike in the past 12 weeks. The wafer fabrication company has succeeded in keeping up the interest of its shareholders since the past year.

Why are investors bullish about LRCX?

The products manufactured by LRCX are viewed as the essentials for the semiconductor industry. 

Semiconductor equipment companies should show double-digit growth year-on-year.

Companies with exposure to memory chip production should benefit from continued growth in memory demand.

In the coming 5 years, LRCX has devised a plan to return 50% of free cash flow to stockholders and raise its quarterly dividend to $1.10 per share (a 120% increase from June 2018).

Besides this, a $2 billion share repurchase program will start in the next 12-18 months.

What do the bears say?

While the semiconductor equipment industry is forecast to grow double-digit in 2018, growth will only be a quarter of the growth exhibited in 2017.

According to Finstead Research, LRCX’s average price target is $246.  There is a 10% upside (go to Finstead.com and type “LRCX upside” to get the latest figures).

The valuation of LRCX is lowest among its peers.

LRCX has a high Short Share of Float compared to the average for the industry, which is an indication of high volatility in the upcoming period.

Micron Technology Pre-Earnings: What Drives The Stock Price?

7:34 pm ET, 17 Dec 2017

Micron semicondutors

Micron Technology (NASDAQ: MU) releases earnings on Tuesday, December 19, after the market close.  Many investors are wondering how to value the stock post-earnings, so we wanted to provide you with a perspective on how to look at the stock price.  

Fundamentally, there are two parts of Micron's business that almost equally contribute to its valuation: DRAM and NAND flash.   

Below are key drivers of Micron's value on the DRAM side that present opportunities for the Micron stock upside or downside:

  • Core DRAM Average Selling Price (ASP): After a phenomenal price rise recently, DRAM ASP for Micron is likely to decline.  One of the reasons for the slowdown in decline could be the ongoing consolidation in the industry as well as renewed demand from new technology and consumer devices. A continuous decline in PC shipments and/or higher competition in the DRAM market can accelerate the rate of DRAM price decline. 
  • Core DRAM market share: Micron's market share in core DRAM is likely to increase gradually over time. The reasons for a higher market share can be the acquisition of a competitor or the introduction of more cost-competitive products. A delay in introducing new technologies by Micron could give its competitors an edge in innovation and pricing, leading to a decline in Micron's market share. 

Below are key drivers of Micron's value on the NAND flash side that present opportunities for the Micron stock upside or downside:

  • NAND flash Average Selling Price (ASP): Even a small variation in NAND flash ASP may lead to a significant upside/downside for Micron.  Increasing consolidation in the memory market and renewed demand from new technology and consumer devices can stabilize the rate of decline in NAND prices. On the other hand, a further decline in PC shipments and/or increase in competition can further put a downward pressure on NAND prices.
  • NAND flash market share: Micron's market share in NAND flash in increasing, but the stock price is sensitive to Micron's relative gain of the market share. The reasons for an increase in market share can be the acquisition of a competitor or the introduction of more cost-competitive products. On the other hand, any delay in introducing new technologies by Micron would give its competitors an edge in innovation and pricing, leading to a possible decline in its market share.

Over the last year, Micron returned +109.07%. This return is higher than Technology sector (24.20%), Semiconductor- Memory Chips industry (8.28%), S&P 500 (18.29%) returns.

Based on Finstead research, MU price target upside is 26.59% (visit Finbot and type "MU upside").

Micron Technology, Inc. (MU) Stock Guide

Updated at: 8:25 pm ET, 12 Nov 2020

Before we start: if you're looking for MU stock price, you can quickly find it out by visiting Finny and typing "MU quote". If you're looking for a quick scoop on MU stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "MU". You'll get all this info in one place. Or you can just type "MU news" to get the latest stock news.

Looking to buy or sell Micron Technology, Inc. (MU)? Interested in getting the full scoop on MU, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this MU stock guide, we'll address key questions about MU, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are MU earnings?
2. When is MU earnings date?
3. What is MU stock forecast (i.e., prediction)?
4. MU buy or sell? What is MU Finny Score?
5. What are the reasons to buy MU? Why should I buy MU stock?
6. What are the reasons to sell MU? Why should I sell MU stock?
7. What are MU key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are MU earnings?

MU trailing 12-month earnings per share (EPS) is $2.37.

2. When is MU earnings date?

MU earnings date is January 07, 2021.

Analyst Predictions

3. What is MU stock forecast (i.e., prediction)?

Based on MU analyst price targets, MU stock forecast is $62.59 (for a year from now). That means the average analyst price target for MU stock is $62.59. The prediction is based on 31 analyst estimates.

The low price target for MU is $35.00, while the high price target is $100.00.

MU analyst rating is Buy.

Analysis

4. MU buy or sell? What is MU Finny Score?

#{finnyScore:86}Our quantitative analysis shows 6 reasons to buy and 1 reason to sell MU, resulting in Finny Score of 86.

5. What are the reasons to buy MU? Why should I buy MU stock?

Here are the reasons to buy MU stock:

  • NAND-based solid-state drives are a growth opportunity for Micron. SSDs, which store information in computers and data centers, should continue to replace traditional hard drives.
  • Micron is among the industry leaders in DRAM and NAND manufacturing process technology, which allows it to control costs better than some competitors.
  • Micron produces a diversified portfolio of memory products using DRAM and NAND, which ultimately helps mitigate sales volatility.
  • The recently released data for PC shipments by International Data Corporation (IDC) reflects an improving trend in PC industry. For the fourth quarter of 2017, IDC reported that worldwide PC shipments registered the first growth in the last six holiday seasons. Moreover, Jay Chou’s, IDC research manager, forward looking statements indicate that the PC industry has been moving toward stabilization.
  • Over the years, Micron has made several significant acquisitions to enhance its capabilities. The most notable among them is the Elpida acquisition (now known as Micron Memory Japan) in 2013 which expanded Micron’s wafer manufacturing capacity by approximately 45%. Moreover, it added Apple Inc. to its customer roster, which should continue to drive growth.
  • We are optimistic about Micron’s future prospects given its acquisition of Inotera Memories Inc. Considering the current market conditions, the company anticipates this buyout to be accretive to its DRAM gross margin, earnings per share and free cash flow. According to the company, the acquisition will also have some operational benefits, leading to efficient management of investment levels and cadence followed by alignment with global manufacturing operations.
  • Micron has a strong cash flow generating ability which helps it to make strategic acquisitions and invest in new products. The company generated approximately $8.15 billion of cash flow from operational activities in fiscal 2017. Additionally, the company ended the fiscal with a cash and short-term investment balance of $5.43 billion.
  • MU quarterly revenue growth was 24.40%, higher than the industry and sector average revenue growth (-1.82% and 0.53%, respectively). See MU revenue growth chart.
  • MU profitability is improving. The YoY profit margin change was 21.47 percentage points. See MU profitability chart.
  • MU forward P/E ratio is 8.27, which is low compared to its industry peers’ P/E ratios. See MU forward P/E ratio chart.
  • MU average analyst rating is Buy. See MU analyst rating chart.
  • MU average analyst price target ($62.59) is above its current price ($56.25). See MU price target chart.
  • MU cash to debt ratio is 1.13, higher than the average industry (0.47) and sector (0.17) cash to debt ratio. See MU cash to debt chart.

6. What are the reasons to sell MU? Why should I sell MU stock?

Let's look at the reasons to sell MU stock (i.e., the bear case):

  • In the commoditylike and cyclical memory chip industry, Micron and its peers suffer operating losses during periodic downturns that are severe enough to depress long-term profitability.
  • In the digital memory market, Micron faces tough competition from Samsung, SK Hynix, and Western Digital.
  • Joint venture partner Intel recently announced plans to spend as much as $5.5 billion on its Dalian factory to make its own memory chips, which will probably compete with Micron.
  • The merger between Western Digital and SanDisk has made it more challenging for Micron to capture share in the newer storage technology space – SSD. The merger will lead to economies of scale, lower costs, greater market reach and acquisitions of new technologies, among other synergies, for the two major storage solution providers. The companies will also be able to offer competitive solutions in cloud-based computing, which has overtaken digital storage solution space over the past couple of years.
  • Micron faces competition from Samsung Electronics Co., Ltd., SK Hynix Inc., Spansion Inc. and Toshiba Corporation in the semiconductor memory market. Notably, wafer capacity increases from its competitors could disrupt DRAM and NAND supply dynamics affecting prices and the company’s results.
  • The company’s business model is exposed to the same cyclical factors, which are typical of the semiconductor market. Its results are also affected by product life cycles, which could grow rapidly or fail to take off. Moreover, if the company misses a product cycle, it could result in market share losses, as competitors capitalize on such opportunities.
  • Micron continues to acquire a large number of companies. While this improves revenue opportunities, business mix and profitability, it also adds to integration risks. Moreover, frequent acquisitions are a distraction for management, which could impact organic growth, going forward.
  • MU stock price ($56.25) is close to the 52-week high ($56.81). Perhaps now is a good time to sell? See MU price chart.

Key Stats

7. What are MU key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for MU:

Metrics MU
Price $67.13
Average Price Target / Upside $62.59 / -6.76%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Semiconductor Memory
Sector Technology
Number of Employees 36,000
Market Cap $64.49B
Forward P/E Ratio 9.48
Price/Book Ratio 3.01
Revenue (TTM) $21.44B
YoY Quarterly Revenue Growth 24.40%
Profit Margin 12.54%

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