Micron Technology (MU) shares moved -3.4 % today, bringing their 52 week performance to -30.4%. Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products worldwide. The large-cap Technology company has 48,000 full time employees and is based in Boise, United States. Micron Technology has returned a 0.75 % dividend yield over the last 12 months.
Earnings Valuation
Compared to the Technology sector's average of 26.5, Micron Technology has a trailing twelve month price to earnings (P/E) ratio of 7.2 and an expected P/E ratio of 16.1. P/E ratios are calculated by dividing the company's share price by its trailing 12 month or forward earnings per share, which stand at $7.75 and $3.46 respectively. Retained earnings have averaged $37,617,500,000.00 over the last 4 years.
Assets and Debt Valuation
Micron Technology's price to book (P/B) ratio is 1.2 compared to the sector average of 5.57.
In Micron Technology’s case, current assets outweigh current liabilities by a factor of 2.9. Current assets refer to company assets that can be transferred into cash within one year, such as accounts receivable, inventory, and liquid financial instruments. Current liabilities, on the other hand, refer to those that will come due within one year.
The Quick Ratio, or Acid Test, is the company's current assets minus its inventory and prepaid expenses divided by its current liabilities. Micron Technology's quick ratio is 1.918. Generally speaking, a quick ratio above 1 signifies that the company is able to meet its liabilities. Since Micron Technology’s debt ratio is 0.4, the company has healthy debt levels.
Intrinsic Value
The Graham number is the square root of (22.5 x earnings per share x book value per share), which for Micron Technology gives us a fair price of $89.19, compared to the stock’s market price of $55.7. Micron Technology’s current market price is -37.5% below its Graham number, which implies that there is upside potential — even for conservative investors who require a significant margin of safety.
Cash Flows
| Date Reported | Cash Flow from Operations ($) | Capital expenditures ($) | Free Cash Flow ($) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-09-01 | 15,181,000,000.0 | -12,067,000,000.0 | 3,114,000,000.0 | 27.73 |
| 2021-09-02 | 12,468,000,000.0 | -10,030,000,000.0 | 2,438,000,000.0 | 2837.35 |
| 2020-09-03 | 8,306,000,000.0 | -8,223,000,000.0 | 83,000,000.0 | -97.57 |
| 2019-08-29 | 13,189,000,000.0 | -9,780,000,000.0 | 3,409,000,000.0 | n/a |
Micron Technology has an irregular stream of positive cash flows. With a coefficient of variability of 66.7% and an average growth rate of 922.5%. The table below shows us that capital expenditures are evolving at a 8.8% rate with a variability of 15.7%, versus 11.6% and 23.5% for cash flows from operations..
Margins
| Date Reported | Revenue ($) | Cost of Revenue ($) | Gross Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-09-01 | 30,758,000,000.0 | 16,860,000,000.0 | 45.18 | 19.52 |
| 2021-09-02 | 27,705,000,000.0 | 17,233,000,000.0 | 37.8 | 23.65 |
| 2020-09-03 | 21,435,000,000.0 | 14,883,000,000.0 | 30.57 | -33.14 |
| 2019-08-29 | 23,406,000,000.0 | 12,704,000,000.0 | 45.72 | n/a |
Micron Technology's cost of revenue is growing at an average rate of 15.2% with variability of 14.0% compared to 10.6% and 16.2% for its revenues. As a result, the company's average operating margin is 39.8% with an average growth rate of 3.3% and a variability of 17.9%.
| Date Reported | Total Revenue ($) | Operating Expenses ($) | Operating Margins (%) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-09-01 | 30,758,000,000.0 | 21,049,000,000.0 | 31.57 | 28.7 |
| 2021-09-02 | 27,705,000,000.0 | 20,909,000,000.0 | 24.53 | 71.78 |
| 2020-09-03 | 21,435,000,000.0 | 18,375,000,000.0 | 14.28 | -54.77 |
| 2019-08-29 | 23,406,000,000.0 | 16,016,000,000.0 | 31.57 | n/a |
Micron Technology's operating expenses are evolving at an average rate of 9.7% with variability of 12.5% compared to 10.6% and 16.% for its revenues. As a result, the company's average operating margin is 25.5% with an average growth rate of 15.2% and a variability of 32.1%.
Sentiment
Micron Technology benefits from positive market sentiment. The stock has an average rating of buy and target prices ranging from $100 to $45. MU is trading -16.79% away from its target price of $66.94. 3.0% of the company's shares are tied to short positions, and 82.5% of the shares are held by institutional investors.
| Holder | Shares | Date Reported | Percentage | Value |
|---|---|---|---|---|
| Vanguard Group, Inc. (The) | 91,605,706 | 2022-09-29 | 8.43% | $5,102,437,894.00 |
| Blackrock Inc. | 83,297,539 | 2022-09-29 | 7.66% | $4,639,672,985.00 |
| Capital Research Global Investors | 47,470,260 | 2022-09-29 | 4.37% | $2,644,093,518.00 |
| State Street Corporation | 45,472,484 | 2022-09-29 | 4.18% | $2,532,817,393.00 |
| Sanders Capital, LLC | 42,131,053 | 2022-09-29 | 3.88% | $2,346,699,684.00 |
| Primecap Management Company | 40,434,127 | 2022-09-29 | 3.72% | $2,252,180,904.00 |
| Capital International Investors | 22,180,998 | 2022-09-29 | 2.04% | $1,235,481,605.00 |
| Geode Capital Management, LLC | 20,245,373 | 2022-09-29 | 1.86% | $1,127,667,291.00 |
| Wellington Management Group, LLP | 14,056,218 | 2022-09-29 | 1.29% | $782,931,353.00 |
| Capital World Investors | 13,808,967 | 2022-09-29 | 1.27% | $769,159,472.00 |
| Holder | Shares | Date Reported | Percentage | Value |
|---|---|---|---|---|
| Vanguard Total Stock Market Index Fund | 32,883,752 | 2022-06-29 | 3.02% | $1,831,625,011.00 |
| Vanguard 500 Index Fund | 25,007,395 | 2022-09-29 | 2.30% | $1,392,911,920.00 |
| Vanguard/Primecap Fund | 24,436,874 | 2022-09-29 | 2.25% | $1,361,133,900.00 |
| Growth Fund Of America Inc | 19,665,670 | 2022-09-29 | 1.81% | $1,095,377,834.00 |
| Invesco ETF Tr-Invesco QQQ Tr, Series 1 ETF | 16,198,242 | 2022-09-29 | 1.49% | $902,242,091.00 |
| Amcap Fund | 13,228,827 | 2022-09-29 | 1.22% | $736,845,673.00 |
| SPDR S&P 500 ETF Trust | 12,608,730 | 2022-10-30 | 1.16% | $702,306,270.00 |
| Fidelity 500 Index Fund | 11,917,125 | 2022-09-29 | 1.10% | $663,783,871.00 |
| iShares Core S&P 500 ETF | 9,798,217 | 2022-09-29 | 0.90% | $545,760,694.00 |
| Fundamental Investors Inc | 8,885,762 | 2022-09-29 | 0.82% | $494,936,950.00 |
Overall, the Market Inference analysis team rates this stock as being fairly valued with mixed growth indicators and positive market sentiment.
