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Micron Technology (MU) earnings: will the bleeding stop?

Royston Roche | 2:29 am ET, 18 Dec 2018

Micron Technology, Inc. (MU) shares are trading at $33.88, down -1%.  The company is announcing its quarterly earnings results on Tuesday after the market close.  What's driving Micron's stock price?  What's MU stock price forecast?

Micron Technology manufactures and sells memory and storage solutions.  The stock fell 15% in the past year.  The company is now available at an attractive forward P/E ratio of 3.90, which presents a significant discount compared to its industry peers.

Investors are showing interest in the company because of strong demand for its chips in Cloud Computing, Artificial Intelligence, and applications used in the Internet of Things.  On the other hand, a few bearish investors worry about lower DRAM and NAND average selling prices (ASPs) caused by overcapacity.  Last quarter’s revenue rose 38% to $8.44 billion and earnings per share came at $3.53 compared to $2.02 for the same period last year.

First-quarter fiscal year 2019 results will be released after market close on December 18, 2018.  Analysts expect the company to earn $2.94 per share on revenue of $8.01 billion.  The company beat analysts’ estimates in the previous four quarters.

What is the sentiment towards the MU stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative. 

Micron Technology, Inc. (MU) forward P/E ratio is 4.24, and it’s low compared to its industry peers’ P/E ratios.

Micron Technology, Inc. (MU) average analyst price target ($61.95) is 74.07% above its current price ($35.59).

For the latest price and information on Micron Technology, Inc., please visit Finstead and search for "MU price" or "MU news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Micron (MU) is up today: what are the key risks?

Carla Olson | 2:25 pm ET, 22 May 2018

Micron (NASDAQ: MU) is up 9% in today's trading. Is it too late to buy the stock now?  What are the key risks to be aware of? 

As a subset of the broader semiconductor industry, the memory space is inherently cyclical.  The commoditized DRAM and NAND markets create volatile pricing along with supply and demand imbalances that create challenging periods for firms like Micron. 

Another major risk is the strong competition from the likes of Samsung, Hynix, and Toshiba, which may be able to develop technologically superior memory solutions than those of Micron, leading to stretches of underperformance where the latter is unable to adequately invest to bridge product portfolio gaps. 

However, there is a lot to like about Micron.  

The management team has solid depth in terms of technical knowledge and industry experience, bolstered by the appointment of Sanjay Mehrotra.  After 30-year Micron veteran Mark Durcan retired  last year, Micron appointed Mehrotra as its next CEO.  Mehrotra boasts an impressive resume, having cofounded SanDisk and served as its CEO from 2011 to 2016. 

Micron’s acquisition record that includes Elpida (2012), Qimonda’s ownership in Inotera Memories (2008), and Toshiba’s DRAM business (2001) is impressive.  Micron’s management has been fairly successful in acquiring manufacturing capacity at discounted prices.  The $2.5 billion acquisition of DRAM manufacturer Elpida provided additional scale at a reasonable price. 

Micron shares trade around the consensus analyst price target.  Visit Finstead and type "MU price target" or "MU upside" to get the latest scoop on equity analysts' position.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Micron Technology (MU): upside ahead?

Carla Olson | 2:48 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). 

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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

Carla Olson | 6:50 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.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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

Carla Olson | 3:18 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.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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

Carla Olson | 8:34 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").

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Micron Technology, Inc. (MU) Buy or Sell Stock Guide

Updated at: 10:16 pm ET, 24 Dec 2018

The analysis below may be helpful to you if you have any of the following questions about MU stock:

  • Is MU a buy or a sell?
  • Should I sell or hold MU stock today?
  • Is MU a good buy / a good investment?
  • What are MU analyst opinions, recommendations, ratings?

Here are MU stock buy reasons/signals:

1. 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.

2. Micron is among the industry leaders in DRAM and NAND manufacturing process technology, which allows it to control costs better than some competitors.

3. Micron produces a diversified portfolio of memory products using DRAM and NAND, which ultimately helps mitigate sales volatility.

4. 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.

5. 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.

6. 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.

7. 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.

8. MU stock price ($29.02) is at the 52-week low. Perhaps now is a good time to buy?

9. MU quarterly revenue growth was 37.50%, higher than the industry and sector average revenue growth (-0.78% and 5.17%, respectively).

10. MU profitability is improving. The YoY profit margin change was 21.47pp.

11. MU forward P/E ratio is 3.94, and it’s low compared to its industry peers’ P/E ratios.

12. MU PEG ratio (P/E adjusted for growth) is 0.14, and it’s low compared to its industry peers’ PEG ratios.

13. MU average analyst rating is Buy.

14. MU average analyst price target ($61.95) is above its current price ($29.02).

Here are MU stock sell reasons/signals:

1. 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.

2. In the digital memory market, Micron faces tough competition from Samsung, SK Hynix, and Western Digital.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

What are your thoughts on MU?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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