Stock Analysis

Is Now The Time To Look At Buying Micron Technology, Inc. (NASDAQ:MU)?

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NasdaqGS:MU
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Today we're going to take a look at the well-established Micron Technology, Inc. (NASDAQ:MU). The company's stock saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$96.06 and falling to the lows of US$66.47. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Micron Technology's current trading price of US$68.19 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Micron Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Micron Technology

What's the opportunity in Micron Technology?

Good news, investors! Micron Technology is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Micron Technology’s ratio of 8.44x is below its peer average of 21.07x, which indicates the stock is trading at a lower price compared to the Semiconductor industry. However, given that Micron Technology’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Micron Technology?

earnings-and-revenue-growth
NasdaqGS:MU Earnings and Revenue Growth May 2nd 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Micron Technology's earnings over the next few years are expected to increase by 68%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since MU is currently below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on MU for a while, now might be the time to make a leap. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MU. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 1 warning sign for Micron Technology you should know about.

If you are no longer interested in Micron Technology, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Micron Technology?

Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products worldwide.

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Rewards

  • Price-To-Earnings ratio (11x) is below the US market (15.5x)

  • Earnings are forecast to grow 58.78% per year

Risks

  • Significant insider selling over the past 3 months

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