Results: Micron Technology, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that Micron Technology, Inc. (NASDAQ:MU) released its second-quarter result to the market. The early response was not positive, with shares down 6.0% to US$96.94 in the past week. Revenues were US$8.1b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.41 were also better than expected, beating analyst predictions by 11%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the most recent consensus for Micron Technology from 31 analysts is for revenues of US$35.4b in 2025. If met, it would imply a decent 13% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 52% to US$6.35. Before this earnings report, the analysts had been forecasting revenues of US$35.0b and earnings per share (EPS) of US$6.13 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for Micron Technology

The consensus price target was unchanged at US$130, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Micron Technology at US$200 per share, while the most bearish prices it at US$75.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Micron Technology's past performance and to peers in the same industry. It's clear from the latest estimates that Micron Technology's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 0.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Micron Technology is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Micron Technology following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$130, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Micron Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Micron Technology going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Micron Technology's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.