Micron Technology is (NASDAQ:) a stock I consider bullish due to its strong growth potential as well as the low valuation and solid Wall Street consensus.

Micron is an innovator in data storage and computer memory. They produce high-performance NAND flash, dynamic random access, and NOR memories.

The company’s products are used to make advances in artificial intelligence, 5G applications, data centers, and client and mobile user experience. TipRanks has Micron stock charts.

Stärkes

Due to Micron Technology’s strong and solid execution, the company has recently achieved record-largest sequential earnings per share improvement.

Micron Technology exceeded both its revenue and earnings expectations each quarter over the last two-years. The company’s embedded businesses also exceeded $1 billion for the first time, showing its highest revenue across automotive and industrial markets.

Recent Results

Micron Technology achieved excellent results during Q3 2021. It ended June 3. Micron Technology reported revenue of $7.4B, which is 19% higher quarter-overquarter and 36% more year-overyear.

The company also reported an operating cash flow in excess of $3.6 Billion, compared to $3.1 billion for the second quarter 2021 and $2 billion for the third quarter 2020. In addition, the company’s non-GAAP net income was reported at $2.2 billion, or $1.88 per diluted share.

Micron’s DRAM technology segment was responsible for 73% of total revenues for the quarter, showing an increase of 23% quarter-over-quarter, and an increase of 52% year-over-year.

The NAND segment comprised 24% of the total revenue, up 10% quarter-over-quarter, and 9% year-over-year. These segments saw a lower-single digit rise in bit shipments and a higher-single digit rise in ASPs compared to last quarter.

For the near future, Micron is aiming to align its long-term bit supply growth rate with the industry’s demand growth across both its DRAM and NAND segments.

According to the company, NAND bit and DRAM supply growth for 2021 will be lower than industry demand. Capital expenditures for fiscal 2021 were also increased to $9.5 billion.

Calculating Valuation Metrics

Micron stock is quite appealing at the moment because it trades at just 7.8x forward normalized earnings and 4.3x forward EBITDA.

Average earnings per share rose by 114.1% from 2021 to 2023 and will continue rising at a strong 51.2% in 2022 and 22.6% 2023.

Wall Street’s Take

Micron has a Strong Buy consensus from Wall Street analysts. This is based upon 13 Buy ratings, 3 Hold ratings, zero Sell ratings over the last three months.

Micron’s average price target is $102.50, which puts 46% upside potential.

Summary and conclusions

Micron Stock looks appealing, because of its strong growth momentum. The stock’s price is low relative to EBITDA, normalized earnings, but Wall Street analysts remain overwhelmingly bullish.

That said, Micron operates in a cyclical industry, so investors should keep in mind that results – and the share price – can be very volatile.

Disclosure: Samuel Smith had no position in the securities listed in this article at the time it was published.

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