Loading...

Micron Technology

Nasdaq:MU
Snowflake Description

Good value with adequate balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
MU
Nasdaq
$57B
Market Cap
  1. Semiconductors and Semiconductor Equipment
Company description

Micron Technology, Inc. provides semiconductor systems worldwide. More info.


Add to Portfolio Compare Print Invest
SHARE PRICE
3 Month History
MU
Industry
5yr Volatility vs Market

Value

 Is Micron Technology undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Micron Technology to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

Current Discount
Amount off the current price Micron Technology is available for.
Intrinsic value
8%
Share price is $49.4 vs Future cash flow value of $53.49
Current Discount Checks
For Micron Technology to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Micron Technology's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • Micron Technology's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Micron Technology's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Micron Technology's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Micron Technology is good value based on earnings compared to the US Semiconductors and Semiconductor Equipment industry average.
  • Micron Technology is good value based on earnings compared to the US market.
Price based on expected Growth
Does Micron Technology's expected growth come at a high price?
  • Micron Technology is good value based on expected growth next year.
Price based on value of assets
What value do investors place on Micron Technology's assets?
  • Micron Technology is good value based on assets compared to the US Semiconductors and Semiconductor Equipment industry average.
X
Value checks
We assess Micron Technology's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (1 check)
  5. Micron Technology has a total score of 4/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (57.78%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Micron Technology is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$19,435

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $6,039 × (1 + 2.47%) ÷ (11.12% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$71,569

Present value of terminal value:
$42,249

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$61,684 = $19,435 + $42,249

Value = Total value / Shares Outstanding ($61,684 / 1,153)

Discount to Share Price

Value per share:
$53.49

Current discount (share price of $49.4): 7.64%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 11.12% = 2.47% + (1.148 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($56,970,808,065).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.148 = 1.01 (1 + (1- 30%) (19.58%))

Levered Beta used in calculation = 1.148



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Micron Technology expected to perform in the next 1 to 3 years based on estimates from 28 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
12.7%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Micron Technology expected to grow at an attractive rate?
  • Micron Technology's earnings growth is expected to exceed the low risk savings rate of 3.6%.
Growth vs Market Checks
  • Micron Technology's earnings growth is expected to exceed the US market average.
  • Micron Technology's revenue growth is expected to exceed the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Micron Technology's earnings are expected to grow by 12.7% yearly, however this is not considered high growth (20% yearly).
  • Micron Technology's revenue is expected to grow by 7.8% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Micron Technology is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be above the current US Semiconductors and Semiconductor Equipment industry average.
  • A decline in Micron Technology's performance (ROE) is expected over the next 3 years.
X
Future performance checks
We assess Micron Technology's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Micron Technology has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Micron Technology performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Micron Technology's growth in the last year to its industry (Semiconductors and Semiconductor Equipment).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Micron Technology's year on year earnings growth rate has been positive on average over the past 5 years.
  • Micron Technology has been loss making last year but is now profitable.
  • Micron Technology has become profitable in the last year making it difficult to compare the industry average.
Earnings and Revenue History
Micron Technology's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Strong return on shareholders funds (ROE > 20%) last year.
  • Micron Technology performed above the US Semiconductors and Semiconductor Equipment industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has been diminishing over 3 years.
X
Past performance checks
We assess Micron Technology's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Semiconductors and Semiconductor Equipment industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Micron Technology has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Micron Technology's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Micron Technology's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Micron Technology is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Micron Technology's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Micron Technology's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of stock/ inventory/ unsold assets.
  • Total debt is covered by total short term assets, assets are 1.1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Micron Technology's level of debt (57.3% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (38.8% vs 57.3% today).
  • Total debt is well covered by annual operating cash flow (73.1%, greater than 20% of total debt).
  • Interest on debt is well covered by earnings (EBIT is 10.7x coverage).
X
Financial health checks
We assess Micron Technology's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Micron Technology has a total score of 4/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Micron Technology's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Micron Technology dividends.
If you bought $2,000 of Micron Technology shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Not paying a dividend.
  • Not paying a dividend.
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Not paying a notable dividend.
  • Not paying a notable dividend.
Current Payout to shareholders
What portion of Micron Technology's earnings are paid to the shareholders as a dividend.
  • Not paying a notable dividend.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years.
X
Income/ dividend checks
We assess Micron Technology's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Micron Technology afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Micron Technology has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Micron Technology's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Sanjay Mehrotra, image provided by Google.
Sanjay Mehrotra
AGE 58
TENURE AS CEO 0.5 years
CEO Bio

Mr. Sanjay Mehrotra has been the Chief Executive Officer and President at Micron Technology, Inc. since May 8, 2017. Mr. Mehrotra has more than 29 years of experience in the non-volatile semiconductor memory industry including engineering and engineering management positions at Intel Corporation, Seeq Technology, Integrated Device Technology and Atmel Corporation. He co-founded SanDisk LLC in 1988 and served as its Chief Executive Officer from January 1, 2011 to May 12, 2016, President from June 2006 to May 12, 2016, Chief Operating Officer since 2001 and Executive Vice President. He served as Vice President of Engineering, Vice President of Product Development, Director of Memory Design and Product Engineering at SanDisk LLC. He served as the Chief Executive Officer and President of Cavium Networks Inc. He has been a Director of QLogic Corp since August 16, 2016, Western Digital Technologies, Inc. since May 12, 2016 and Cavium, Inc. (Cavium Networks, Inc.) since July 2009. He serves as a Board Member of Divio. He serves on the Engineering Advisory Board of the University of California, Berkeley. He served as a Director of Western Digital Corporation from May 12, 2016 to February 6, 2017. He served as a Director of SanDisk LLC from July 21, 2010 to May 12, 2016. He holds several patents and has published articles in the area of non-volatile memory design and flash memory systems. Mr. Mehrotra received a B.S. and an MS Degrees in Electrical Engineering and Computer Sciences from the University of California, Berkeley.

CEO Compensation
  • Sanjay's compensation has been consistent with company performance over the past year.
  • No compensation data for Sanjay.
Management Team Tenure

Average tenure and age of the Micron Technology management team in years:

1.2
Average Tenure
54.7
Average Age
  • The average tenure for the Micron Technology management team is less than 2 years, this suggests a new team.
Management Team

Ernie Maddock

TITLE
Senior VP & CFO
COMPENSATION
$3M
AGE
59
TENURE
2.4 yrs

Scott DeBoer

TITLE
Executive Vice President of Technology Development
COMPENSATION
$2M
AGE
51
TENURE
0.4 yrs

Steve Thorsen

TITLE
Senior Vice President of Worldwide Sales
COMPENSATION
$2M
AGE
52
TENURE
0.4 yrs

Brian Shirley

TITLE
Senior Vice President of DRAM & Emerging Memory Engineering
COMPENSATION
$4M
AGE
48
TENURE
0.4 yrs

Sanjay Mehrotra

TITLE
President
AGE
58
TENURE
0.5 yrs

Manish Bhatia

TITLE
Executive Vice President of Global Operations
AGE
45
TENURE
0.1 yrs

Trevor Schultz

TITLE
Chief Information Officer & VP of Information Systems
AGE
75
TENURE
2.3 yrs

Joel Poppen

TITLE
Senior VP of Legal Affairs
AGE
53
TENURE
3.9 yrs

Mike Sadler

TITLE
Chief Strategy Officer & VP of Corporate Development
COMPENSATION
$854K
AGE
60

April Arnzen

TITLE
Senior Vice President of Human Resources
AGE
46
TENURE
0.4 yrs
Board of Directors Tenure

Average tenure and age of the Micron Technology board of directors in years:

7.6
Average Tenure
62
Average Age
  • The tenure for the Micron Technology board of directors is about average.
Board of Directors

Bob Switz

TITLE
Chairman
COMPENSATION
$500K
AGE
71
TENURE
5.8 yrs

Sanjay Mehrotra

TITLE
President
AGE
58
TENURE
0.5 yrs

Larry Mondry

TITLE
Independent Director
COMPENSATION
$385K
AGE
57
TENURE
12.6 yrs

Mercedes Johnson

TITLE
Independent Director
COMPENSATION
$393K
AGE
63
TENURE
12.4 yrs

Bob Bailey

TITLE
Independent Director
COMPENSATION
$350K
AGE
60
TENURE
10.8 yrs

Pat Byrne

TITLE
Independent Director
COMPENSATION
$350K
AGE
57
TENURE
6.6 yrs

Rich Beyer

TITLE
Independent Director
COMPENSATION
$350K
AGE
68
TENURE
4.8 yrs
Recent Insider Trading
  • Micron Technology insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Micron Technology's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Micron Technology has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

Micron Technology, Inc. provides semiconductor systems worldwide. The company operates through four segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, and Embedded Business Unit. It offers DDR3 and DDR4 DRAM products for computers, servers, networking devices, communications equipment, consumer electronics, automotive, and industrial applications; lower power DRAM products for smartphones, tablets, automotive, laptop computers, and other mobile consumer device applications; DDR2 DRAM and DDR DRAM, GDDR5 and GDDR5X DRAM, SDRAM, and RLDRAM products for networking devices, servers, consumer electronics, communications equipment, computer peripherals, and automotive and industrial applications, as well as for computer memory upgrades; and hybrid memory cube semiconductor memory devices. The company also provides NAND products, which are electrically re-writeable, non-volatile semiconductor memory, and storage devices; client solid-state drives (SSDs) for notebooks, desktops, workstations, and other consumer applications; enterprise SSDs for server and storage applications; cloud SSDs; and multi-chip package and managed NAND products. In addition, it manufactures products that are sold under other brand names; and resells flash memory products that are purchased from other NAND Flash suppliers. Further, the company provides 3D XPoint non-volatile memory products; and NOR Flash, which are electrically re-writeable and semiconductor memory devices for automotive, industrial, connected home, and consumer applications. It markets its products to original equipment manufacturers and retailers through its internal sales force, independent sales representatives, and distributors; and through a Web-based customer direct sales channel, and channel and distribution partners. The company was founded in 1978 and is headquartered in Boise, Idaho.

Details
Name: Micron Technology, Inc.
Ticker: MU
Exchange: NasdaqGS
Founded: 1978
Market Cap: $56,970,808,065
Shares outstanding: 1,153,255,224
Website: http://www.micron.com
Address: Micron Technology, Inc.
8000 South Federal Way,
Boise,
Idaho, 83707,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS MU Common Stock Nasdaq Global Select US USD 01. Jun 1984
DB MTE Common Stock Deutsche Boerse AG DE EUR 01. Jun 1984
XTRA MTE Common Stock XETRA Trading Platform DE EUR 01. Jun 1984
SWX MU Common Stock SIX Swiss Exchange CH CHF 01. Jun 1984
BIT MU Common Stock Borsa Italiana IT EUR 01. Jun 1984
WBAG MU Common Stock Wiener Boerse AG AT EUR 01. Jun 1984
BMV MU * Common Stock Bolsa Mexicana de Valores MX MXN 01. Jun 1984
Number of employees
Current staff
Staff numbers
34,100
Micron Technology employees.
Industry
Industry: Semiconductors
Sector: Semiconductors and Semiconductor Equipment