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Micron (MU)
NASDAQ:MU
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Micron
(NASDAQ:MU)71Outperform
Positive Factors
AI HBM Opportunity
Micron's AI HBM opportunity is expected to drive significant revenue and margin expansion.
Data Center Demand
Strong demand for high capacity DRAM products is expected to generate multiple billions of dollars in revenue.
Negative Factors
NAND Market Weakness
The collapse in the NAND market is the biggest hindrance to Micron revenue and margins.
Micron (MU) vs. S&P 500 (SPY)
Market Cap
$100.88B
Dividend Yield0.51%
Average Volume (3M)21.06M
Price to Earnings (P/E)26.1
Beta (1Y)2.22
Revenue Growth79.80%
EPS GrowthN/A
CountryUS
Employees48,000
SectorTechnology
Sector Strength48
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)3.46
Shares Outstanding1,114,171,900
10 Day Avg. Volume19,427,490
30 Day Avg. Volume21,056,371
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.47
Price to Cash Flow (P/CF)7.80
P/FCF Ratio428.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$136.33Price Target Upside49.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
Micron Business Overview & Revenue Model
Company DescriptionFounded in 1978 and based in Idaho, Micron Technology, Inc. is a leader in providing innovative memory and storage solutions worldwide. It produces computer memory and computer data storage including dynamic random-access memory, flash memory, and USB flash drives. The company operates through four segments: Compute and Networking Business Unit (CNBU); Mobile Business Unit (MBU); Storage Business Unit (SBU); and Embedded Business Unit (EBU).
How the Company Makes MoneyMicron makes money primarily by designing, manufacturing, and selling semiconductor memory products. Its revenue model is centered around the production and sale of DRAM and NAND flash memory, which are integral to a wide range of electronic devices. The company serves various markets, including data centers, personal computing, mobile devices, automotive, industrial applications, and consumer electronics. Micron collaborates with major technology companies and original equipment manufacturers (OEMs) to integrate its memory and storage solutions into their products. Additionally, the company invests in research and development to advance its technology and maintain its competitive edge in the market. Key revenue streams include direct sales to OEMs, channel partners, and distributors worldwide.
Micron Financial Statement Overview
Summary
Micron shows strong financial recovery with significant revenue and margin improvements. The balance sheet remains robust with low leverage, and cash flows are stable despite high capital investments. Continued focus on asset utilization and managing capital expenditures could enhance financial health.Income Statement
Micron's income statement shows resilience in a volatile industry. The TTM (Trailing-Twelve-Months) Gross Profit Margin is approximately 30.9%, indicating strong production efficiency. The Net Profit Margin improved significantly from negative in 2023 to approximately 13.3% in TTM 2024, showcasing robust recovery. Revenue growth between 2023 and TTM 2024 is remarkable at 87.2%, driven by market recovery and operational improvements. EBIT and EBITDA margins at 15% and 44.6% respectively in TTM 2024 highlight effective cost management and operational leverage.85
Very Positive
Balance Sheet
Micron's balance sheet illustrates a sound financial structure with a Debt-to-Equity ratio of 0.30, reflecting conservative leverage. The Equity Ratio stands at 65.5%, emphasizing a strong capital base. However, the Return on Equity is moderate at 8.3%, suggesting room for improving asset utilization and profitability.78
Positive
Cash Flow
The cash flow statement indicates stable cash generation. There is a notable improvement in Free Cash Flow from negative in 2023 to $554 million in TTM 2024. Operating Cash Flow is robust at $10.35 billion, resulting in a healthy Operating Cash Flow to Net Income ratio of 2.67. However, Free Cash Flow to Net Income ratio is lower at 0.14, pointing to high capital expenditures impacting free cash flow.72
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 29.09B | 25.11B | 15.54B | 30.76B | 27.70B | 21.43B | Gross Profit |
| 9.00B | 5.61B | -1.42B | 13.90B | 10.42B | 6.55B | EBIT |
| 4.35B | 1.30B | -5.75B | 9.70B | 6.28B | 3.00B | EBITDA |
| 12.99B | 9.58B | 2.49B | 16.88B | 12.62B | 8.83B | Net Income Common Stockholders |
| 3.88B | 778.00M | -5.83B | 8.69B | 5.86B | 2.69B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.11B | 8.11B | 9.59B | 9.33B | 8.63B | 8.14B | Total Assets |
| 69.42B | 69.42B | 64.25B | 66.28B | 58.85B | 53.68B | Total Debt |
| 14.01B | 14.01B | 13.93B | 7.52B | 7.28B | 7.18B | Net Debt |
| 6.97B | 6.97B | 5.36B | -746.00M | -483.00M | -448.00M | Total Liabilities |
| 24.29B | 24.29B | 20.13B | 16.38B | 14.92B | 14.68B | Stockholders Equity |
| 45.13B | 45.13B | 44.12B | 49.91B | 43.93B | 39.00B |
| Cash Flow | Free Cash Flow | ||||
| 554.00M | 121.00M | -6.12B | 3.11B | 2.44B | 83.00M | Operating Cash Flow |
| 10.35B | 8.51B | 1.56B | 15.18B | 12.47B | 8.31B | Investing Cash Flow |
| -9.90B | -8.31B | -6.19B | -11.59B | -10.59B | -7.59B | Financing Cash Flow |
| -1.91B | -1.84B | 4.98B | -2.98B | -1.78B | -317.00M |
Micron Technical Analysis
Negative
91.20
Price Trends
95.43
Negative
99.60
Negative
106.40
Negative
Market Momentum
-1.01
Positive
44.27
Neutral
17.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MU, the sentiment is Negative. The current price of 91.2 is below the 20-day moving average (MA) of 95.73, below the 50-day MA of 95.43, and below the 200-day MA of 106.40, indicating a bearish trend. The MACD of -1.01 indicates Positive momentum. The RSI at 44.27 is Neutral, neither overbought nor oversold. The STOCH value of 17.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MU.
Micron Risk Analysis
Micron disclosed 33 risk factors in its most recent earnings report. Micron reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Micron Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.83T | 39.48 | 91.87% | 0.03% | 114.20% | 146.26% | |
73 Outperform | $161.82B | 97.92 | 2.85% | ― | 13.69% | 91.75% | |
71 Outperform | $100.88B | 26.15 | 8.30% | 0.51% | 79.80% | ― | |
70 Outperform | $177.37B | 37.50 | 28.39% | 2.74% | -10.72% | -26.60% | |
68 Neutral | $15.52B | 10.65 | 13.99% | ― | 38.59% | ― | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
54 Neutral | $92.36B | ― | -18.89% | 2.11% | -2.08% | -1212.72% |
* Technology Sector Average
Performance Comparison
MU
Micron
91.20
-2.87
-3.05%
AMD
Advanced Micro Devices
100.75
-104.38
-50.88%
INTC
Intel
21.33
-21.38
-50.06%
NVDA
Nvidia
115.99
30.05
34.97%
TXN
Texas Instruments
194.84
28.85
17.38%
WDC
Western Digital
44.63
-3.34
-6.96%
Micron Earnings Call Summary
Earnings Call Date: Dec 18, 2024 | % Change Since: -12.10% | Next Earnings Date: Mar 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong growth in the data center segment and leadership in advanced memory technologies like HBM and LPDDR5X. However, challenges in the NAND market and consumer segments, along with pressure on gross margins, present headwinds. While there are significant achievements and a positive outlook for certain segments, the negative aspects balance out the positive news.Highlights
Data Center Segment Growth
Data Center segment showed a robust growth trajectory, with record-setting revenue and market share performance. Data center revenue grew 40% sequentially and 400% year-over-year in FQ1, now making up over 50% of overall revenue.
Strong Position in Enterprise and Data Center SSD
Micron increased its market share in enterprise and data center SSDs, reaching approximately 14% in Q3 and growing sequentially in fiscal Q1. This segment now accounts for about 65% of their overall NAND business.
HBM and LPDDR5X Leadership
Micron is leading the market in LPDDR5X and HBM technologies, with significant innovations and strong demand from data centers. They expect to achieve their natural bit share in HBM by the second half of calendar 2025.
Manufacturing and Technology Advancements
Micron announced industry-leading products such as the 9550 fastest SSD and the first PCIe Gen5 60-terabyte SSD on the market, contributing to a solid performance.
Lowlights
NAND Market Challenges
NAND-related market conditions remain challenging, impacting Q2 results with a meaningful decline in NAND volume. A significant portion of the sequential revenue decline in Q2 is attributed to NAND.
Gross Margin Pressure
Gross margin is under pressure due to NAND market conditions and underload charges, impacting fiscal Q3 by approximately 100 basis points.
Consumer Segment Weakness
Near-term outlook impacted by delays in the PC refresh cycle and cautious consumer segment demand. Inventory levels at customers remain high, affecting shipment rates.
Impact of HBM Transition on DRAM
As HBM capacity increases, there is a significant impact on conventional DRAM capacity due to a trade ratio effect, potentially affecting overall DRAM supply.
Company Guidance
In the first quarter of fiscal 2025 earnings call for Micron Technology (MU), the executives provided guidance on several key metrics affecting their business outlook. They discussed a projected 100 basis point decline in gross margins for Q2, largely attributed to challenges in the NAND market, including mix, pricing, and lower shipments. The executives highlighted the robust growth trajectory of High Bandwidth Memory (HBM) and data center DRAM, despite a temporary moderation in data center solid-state drives (SSD) and consumer-oriented segments. They noted that data center SSDs accounted for about 65% of their overall NAND business, with a market share reaching approximately 14% in Q3 of the previous year. The company anticipates a sequential increase in bit shipments starting in fiscal Q3, driven by the expected recovery in data center capital expenditures and improved demand conditions. Additionally, they mentioned that their actions to reduce NAND wafer starts are in response to challenging market conditions, aiming to align supply growth with demand forecasts. Overall, the company remains optimistic about their data center business, expecting continued strength in DRAM and NAND shipments through fiscal and calendar 2025.Micron Corporate Events
Private Placements and FinancingShareholder Meetings
Micron’s Strategic Financial Moves and Board Elections 2025
Positive
Jan 21, 2025
On January 17, 2025, Micron Technology, Inc. entered into a new Term Loan Credit Agreement, obtaining a $1.6835 billion loan to refinance an existing credit agreement dated November 3, 2022. This new agreement allows Micron to potentially increase its borrowing capacity by an additional $750 million and outlines various financial covenants and restrictions. At the 2024 Annual Meeting on January 16, 2025, Micron’s stockholders approved a new equity incentive plan and elected directors, with all proposed measures receiving substantial support.
Private Placements and FinancingBusiness Operations and StrategyRegulatory Filings and Compliance
Micron Secures $6.44B for U.S. Expansion Projects
Positive
Dec 10, 2024
Micron Technology has secured substantial funding agreements through the United States Department of Commerce’s CHIPS Incentives Program, amounting to up to $6.44 billion. These funds will be used for the construction of fab facilities in Idaho and New York, and for production modernization in Virginia, reflecting a significant expansion of Micron’s U.S. manufacturing capabilities. The agreements include strict compliance requirements, potential clawbacks, and restrictions on dividends and share repurchases, underscoring the strategic importance and regulatory complexity of these projects.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.