Stock Analysis

What Is Micron Technology, Inc.'s (NASDAQ:MU) Share Price Doing?

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NasdaqGS:MU
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Let's talk about the popular Micron Technology, Inc. (NASDAQ:MU). The company's shares saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Micron Technology’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Micron Technology

What is Micron Technology worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.7% below my intrinsic value, which means if you buy Micron Technology today, you’d be paying a fair price for it. And if you believe the company’s true value is $80.64, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Micron Technology’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Micron Technology generate?

earnings-and-revenue-growth
NasdaqGS:MU Earnings and Revenue Growth January 29th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 91%, 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? MU’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on MU, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Micron Technology at this point in time. You'd be interested to know, that we found 1 warning sign for Micron Technology and you'll want to know about it.

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 (11.3x) is below the US market (15.1x)

  • Earnings are forecast to grow 58.78% per year

Risks

  • Significant insider selling over the past 3 months

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