Shares of chipmaker Micron (MU) plunged in after-hours trading after the company reported earnings for its first quarter of Fiscal Year 2025 that was accompanied by a huge guidance miss. Earnings per share came in at $1.79, which beat analysts’ consensus estimate of $1.76 per share. Sales increased by 84% year-over-year, with revenue hitting $8.71 billion. This was in line with estimates.
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In addition, the firm reported an adjusted operating income margin of 27.5%, beating the 27% forecast. However, cash flow from operations fell short at $3.24 billion, compared to the $4.1 billion estimate.
Q2 2025 Outlook
For the upcoming quarter, Micron projects adjusted earnings in the range of $1.33 to $1.53 per share – a huge miss compared to the $1.92 per share consensus estimate. Furthermore, revenue is expected to be between $7.7 billion and $8.1 billion, with the midpoint also significantly below the estimated $8.99 billion. This undoubtedly led to the drop in share price in after-hours.
However, Micron CEO and President Sanjay Mehrotra stated that while consumer-focused markets are currently facing short-term weakness, growth is expected to rebound in the second half of the fiscal year. He highlighted that the company continues to gain market share in high-margin, strategically significant segments and emphasized its strong position to capitalize on AI-driven growth. Nevertheless, this was not enough to please investors.
Investor Sentiment for MU Stock
The sentiment among TipRanks investors is currently Neutral. Out of the 774.491 portfolios tracked by TipRanks, 3.4% hold MU stock. In addition, the average portfolio weighting allocated towards MU among those who do have a position is 5.18%. This suggests that investors of the company are confident about its future. Furthermore, in the last 30 days, 1.3% of those holding the stock decreased their positions, while 1.2% increased it in the past seven days.
Is MU a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MU stock based on 23 Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 27% rally in its share price over the past year, the average MU price target of $153.05 per share implies 47.3% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
