Micron Technology is an American company that produces chips and other semiconductor products. It specializes in DRAM and NAND memory chips, flash memory, and SSD storage devices. Consumer products are sold under the Crucial brand. The company's stock experienced a significant decline in 2024, which does not align with its financial position, creating an attractive buying opportunity. The fair value of Micron’s shares is estimated at $164.3, with a potential upside of 86.9%. The dividend yield is 0.5%.
Investment thesis
🔼 Strong financial performance. Micron delivered solid results for the third quarter of the 2024 fiscal year (ending May 30, 2024). Revenue surged by 82% y/y, reaching $6.81 bln. Net income amounted to $332 mln compared to a loss of $1.9 bln in Q3 2023. Earnings per share (EPS) were $0.3. Micron’s results exceeded market expectations.
🔼 Optimistic outlook. With the growth in artificial intelligence (AI) technologies, demand for various chips, including those produced by Micron, is expected to increase. The company's revenue is projected to grow at a compound annual growth rate of 26% over the next three years, while the average growth rate for the U.S. semiconductor industry is expected to be 18%.
🔽 Risks. Micron is scheduled to release its financial report on September 25, which may lead to increased stock volatility. While this report is expected to exceed forecasts, the market currently holds high expectations for tech companies involved in AI. Micron's outlook will play a crucial role in shaping investor sentiment.
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Disclaimer
The information provided above is not an investment recommendation and does not guarantee or promise profitability. Before investing, you should assess the potential risks and rewards and determine your willingness and ability to accept such risks.
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