Today we're going to take a closer look at large-cap Technology company Micron Technology, whose shares are currently trading at $87.26. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Micron Technology's Valuation Is in Line With Its Sector Averages:
Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products worldwide. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 35.0 and an average price to book (P/B) ratio of 7.92. In contrast, Micron Technology has a trailing 12 month P/E ratio of -13.9 and a P/B ratio of 2.25.
Micron Technology's PEG ratio is 79.54, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
An Exceptionally Strong Balance Sheet But The Underlying Business is Looking Troubled:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $30,391 | $23,406 | $21,435 | $27,705 | $30,758 | $15,540 |
| Revenue Growth | n/a | -22.98% | -8.42% | 29.25% | 11.02% | -49.48% |
| Operating Margins | 49% | 32% | 14% | 23% | 32% | -37% |
| Net Margins | 47% | 27% | 13% | 21% | 28% | -36% |
| Net Income (MM) | $14,135 | $6,313 | $2,687 | $5,861 | $8,687 | -$5,658 |
| Net Interest Expense (MM) | $342 | $128 | $194 | $183 | $189 | -$388 |
| Depreciation & Amort. (MM) | $4,759 | $5,424 | $5,650 | $6,214 | $7,116 | $7,756 |
| Earnings Per Share | $11.51 | $5.51 | $2.37 | $5.14 | $7.75 | -$5.14 |
| EPS Growth | n/a | -52.13% | -56.99% | 116.88% | 50.78% | -166.32% |
| Diluted Shares (MM) | 1,174 | 1,129 | 1,135 | 1,130 | 1,090 | 1,100 |
| Free Cash Flow (MM) | $8,521 | $3,409 | $83 | $2,438 | $3,114 | -$6,117 |
| Capital Expenditures (MM) | $8,879 | $9,780 | $8,223 | $10,030 | $12,067 | $7,676 |
| Current Ratio | 2.9 | 2.56 | 2.91 | 3.1 | 3.51 | 3.53 |
| Total Debt (MM) | $4,132 | $5,650 | $6,629 | $7,022 | $10,265 | $13,505 |
| Net Debt / EBITDA | -0.02 | -0.1 | 0.07 | -0.13 | 0.04 | 2.7 |
Micron Technology has weak operating margins with a negative growth trend, declining EPS growth, and positive cash flows. On the other hand, the company has an excellent current ratio working in its favor. Furthermore, Micron Technology has significant leverage levels.
