So I’ve taken my daily Adderall, caffeine, and nicotine; I’m in a DD mood. I was requested by a few users to write an $MU (Micron Technology) DD.
Company profile:
“The world is moving to a new economic model, where data is driving value creation in ways we had not imagined just a few years ago. Data is today’s new business currency, and memory and storage are strategic differentiators which will redefine how we extract value from data to expand the global economy and transform our society.
As the leader in innovative memory solutions, Micron is helping the world make sense of data by delivering technology that is transforming how the world uses information to enrich life for all. Through our global brands — Micron and Crucial — we offer the industry’s broadest portfolio. We are the only company manufacturing today’s major memory and storage technologies: DRAM, NAND, and NOR technology.
By providing foundational capability for innovations like AI and 5G across data center, the intelligent edge, and consumer devices, we unlock innovation across industries including healthcare, automotive and communications. Our technology and expertise are central to maximizing value from cutting-edge computing applications and new business models which disrupt and advance the industry.
From our roots in Boise, Idaho, Micron has grown into an influential global presence committed to being the best memory company in the world. This means conducting business with integrity, accountability, and professionalism and supporting our global community.” (https://www.micron.com/about/our-company/corporate-profile)
Introduction:
Don’t sell MU now, it outperformed most of it’s peers ”MICRON TECHNOLOGY INC was among the best performers on Friday. It returned +7.8% to close at 83.03. On a day when the overall market breadth was 44%, it closed higher than 68% of the market. In comparison, the benchmark SP500 index closed today at -0.0014%.”
This is going to be a DD focused on the value of the products (Micron and Crucial memory, data center presence, and consumer use), as well as the value of the company. MU is definitely a long term play, though there is a lot of short term interest at the moment that may cause a run.
It is worth noting that MU is a cyclical stock, dependant upon memory demand, hence why I have focused on future memory demand in my DD.
Micron climbed a lot on Friday. This was due to an analyst at Evercore ISI adding the memory chip maker to his list of top stock picks. He anticipates a return to earnings growth next year..
MU was up 8.4% to $83.52 during Friday afternoon trading. It was the second best performer of the day for the S&P 500 (shortly before 3PM). Evercore ISI analyst C.J. Muse noted that though shares of memory chip makers such as Micron have lagged behind the PHLX Semiconductor index since early June, he believes tides are shifting.
“We believe negative sentiment was due to investor concerns over the sustainability of PC, handsets, and cloud demand, which was also compounded by DRAM spot pricing that began to flatten out in May/June 2023,” wrote Muse.
Muse noted that WSt expectations for Micron’s Feb/May quarter earnings have been cut by 33%/31% respectively, since August. While there could be further downside, weakness is now priced in. He believes either Feb or May quarter will be a bottom for Micron’s earnings. Micron shares tend to outperform one or two quarters before a bottom in earnings, hence he believes the stock could begin a run soon.
“And once they do—we think the stock action could be fast,” Muse wrote. “We also note most investors expected the memory trade to begin to work in 1Q22 based on our investor survey last month and would not be surprised to start seeing investors look to get positioned in the name ahead of January 1st, 2023.” Other reasons for the climb:
- Citi analyst Christopher Danely said in a research note that recent channel checks show there has been increased demand for DRAM memory among PC makers, and that a pricing correction in the DRAM market is “drawing to a close”.
- Danely also said the outlook for enterprise server sales in Q1 22 is better than expected. The server market is improving “due to recent increases in spending from cloud companies such as Meta and Google”. Danely maintained his buy rating and a $120/share price target.
- Earlier this week hedge fund Appaloosa Management said it recently sold off almost 3 million shares of MU, to leave the fund with 2.75 million shares.
Higher future DRAM demand and how this affects Micron:
Micron is a market leader in DRAM and NAND memory, with a market share of 20%/11% respectively. In 2023, DRAM revenues accounted for 72% of MU’s total revenues, and grew by 38% YoY. The company is improving its 1-alpha DRAM to compete with Samsung/SK Hynix. The DRAM market is expected to grow over the long term, due to rising DRAM use in smartphones, PC’s, consumer electronics, automotive and industrials.
Smartphones: Since 2016 the average DRAM capacity has risen from 2.4GB to 4.75GB (average of iOS and Android). Micron has stated that 5G phones feature 50% more DRAM than 4G phones. It also expects that 5G and AI will drive new applications such as optimised video capture and editing, which will further fuel DRAM requirements. Phones are very much powerful PC’s living in our pockets now, and as software advances we can expect that DRAM requirements will increase. For example, think about how old iPhones struggle to run new versions of iOS, partially due to insufficient DRAM in older models.
Data Center: DRAM is integral in servers, notably in data centre applications, it is rapidly evolving to support growing workloads for AI, big data and machine learning. Micron is working on DDR5 to support data center transitions to DDR5 platforms this year. Data creation is projected to grow at a rate of around 23% in the next 5 years. This would require larger cloud infrastructure in order to handle this. Data centres are generally backed up by an SSD storage array, Micron remains committed to this through it’s NVMe SSD portfolio, and is introducing PCIe 4.0 data centre SSDs. As demand for cloud storage rises, Micron could see increased demand for these products.
PC/Gaming: Faster RAM leads to faster processing speeds. Intensive use of PCs such as gaming, video editing and streaming require better and more efficient RAM. From Statista, the chart below shows increasing PC DRAM memory density, with the share of memory >4GB increasing to 82% in 2020 (https://www.statista.com/statistics/781438/worldwide-computer-dram-shipment-market-share-by-density/)
Automotive DRAM: Automotive DRAM only accounts for 1.8% of the DRAM market currently. However, advances in automotive tech such as autonomous driving and vehicle connectivity will drive an increase in this. The Tesla Model 3 has 14GB of DRAM, and next-generation models will use GDDR5 and are expected to have a minimum of 20GB. Although, the average vehicle is estimated to have only 4GB of DRAM in 2023. I expect newer/next-gen vehicles will continue to use even more computing power/DRAM, therefore increasing the market share of Automotive DRAM. Note that Micron are specialists in GDDR5 and 6 memory. Auto NAND accounts for 7% of the NAND market, it is also expected to see rapid growth due to the rise of ADAS and clusters of vehicle instruments added to infotainment (requiring greater storage capabilities).
Industrials & Consumer Electronics: DRAM is used in systems/equipment in manufacturing processes. Industrial type DRAM is more focused on providing a stable solution for reliability. Automation and IoT (Internet of Things) is likely to increase demand for memory/increased memory. In consumer electronics, DRAM is used in tablets, wearables, games consoles, etc. This is the least significant growth factor but still important to note. Another important note is that the PS5 and Xbox use Micron GDDR6 RAM. Samsung and Micron both started producing GDDR6 RAM 3 years ago, while SK Hynix is still ramping up production. The PS5 actually uses Micron RAM (16GB GDDR6 SDRAM), while 512MB of SK Hynix DDR4 RAM is used for background tasks. THe Xbox Series X also uses 16GB of Micron GDDR6 SGRAM.
My Nvidia thesis:
I worked as a qualified IT Hardware, Networking and Software Engineer for 5 or 6 years, and am now an Engineering student at college. I’m a computer geek, especially for hardware. So I’m going to enjoy writing this part. I hope my knowledge lends to it.
Although you won’t find much correlation in the charts, apart from the recent semi-boom. Nvidia and Micron are very strongly linked.
Increasing penetration of GPU’s in data centres
Recently, data centres have developed into the fields of AI and Machine Learning for functions where a solution is required via rapid iterations. This works well with GPU’s. GPU’s lend themselves perfectly towards Machine Learning (ML-OLD) functions in data centres.
Now remember that GPU’s are highly memory intensive. This is corroborated from the data specs of Nvidia’s newest chip, the A100 GPU just released, designed for AI in data centers. You can also read more here.
“The first GPU to use Ampere will be Nvidia’s new (as of 2020) A100, built for scientific computing, cloud graphics, and data analytics. Nvidia new A100 GPU will also include 19.5 teraflops of performance, 6,912 CUDA cores, 40GB of memory, and 1.6TB/s of memory bandwidth.” There’s also a version using 80GB!
“Smarter and Faster Memory A100 brings massive amounts of compute to data centers. To keep those compute engines fully utilized, it has a class-leading 2 terabytes per second (TB/sec) of memory bandwidth, more than double the previous generation. In addition, A100 has significantly more on-chip memory, including a 40 megabyte (MB) level 2 cache—7X larger than the previous generation—to maximize compute performance.*”
I cannot find any sources (after half an hour of searching) that specify the exact manufacturer of the A100’s memory. However based on my experience, Nvidia consumer GPU’s use either Micron, Samsung or SK Hynix memory. Micron does manufacture the HBM2E memory used in the A100, hence I suspect Micron is one of their memory vendors for their data centre GPU’s.
I found that the Nvidia DGXA100 system (the world’s first AI system built on the A100 Tensor Core GPU, using 8 A100 GPU’s with up to 640GB of GPU memory), actually happens to use Micron NVME drives. See below: *$ sudo nvsm show /systems/localhost/storage/drives/nvmeXn1 Example output: */systems/localhost/storage/drives/nvme5n1 Properties: Capacity = 3840755982336 U.2 NVMe Cache Drive Replacement NVIDIA DGX A100 System DU-10044-001 _v03 | 31 BlockSizeBytes = 7501476528 SerialNumber = 174719FCF9F1 PartNumber = N/A Model = Micron_9200_MTFDHAL3T8TCT Revision = 100007H0 Manufacturer = Micron Technology Inc Status_State = Enabled Status_Health = OK Name = Non-Volatile Memory Express MediaType = SSD IndicatorLED = N/A EncryptionStatus = N/A HotSpareType = N/A Protocol = NVMe NegotiatedSpeedsGbs =
GDDR6X and GDDR5X memory in Nvidia high-end graphic cards: The GTX1080, 1080Ti, and Pascal Nvidia TitanX all used GDDR5X memory. The RTX 3080 and 3090 GPUs use GDDR6X memory. Who is the world’s only manufacturer of GDDR5X and GDDR6X memory? Micron. “Micron has created the world’s fastest discrete graphics memory solution, GDDR6X. GDDR6X was launched with NVIDIA on the GeForce® RTX™ 3090 and GeForce® RTX™ 3080 GPUs (including Ti) to take graphics beyond gaming into true AI. Watch to learn how Micron was able to achieve incredible speeds up to 1 TB/s system memory bandwidth.“
Comparison between GDDR5X, GDDR6 and GDDR6X
This means Nvidia is dependant on Micron to deliver/manufacture their higher end GPU’s (as Micron are the only manufacturer of GDDR6X memory). Furthermore, Micron GDDR6 memory is commonly found in RTX3050, 3060, 3070 (including Ti) GPU’s. They are not the only manufacturer for this, but are frequently used, for example my RTX 3060 laptop has Micron memory, and my RTX 2070 Super has Micron memory. I use them for crapto mining, and the memory overclocks well.
Overall I would conclude as long as Nvidia remains strong/bullish, you can be bullish on Micron as Nvidia are dependent on them for their products, particularly in the high-end.
The AMD link:
Although not as dependent on Micron as Nvidia. AMD are using Micron GDDR6 memory in their RX6000 series graphics cards:
“Micron Technology, Inc. (Nasdaq: MU), today (November 1st) announced that its high-performance 16Gb/16Gbps GDDR6 memory solution is now available with AMD Radeon™ RX 6000 Series graphics cards built on the AMD RDNA™ 2 gaming architecture. Using Micron’s advanced 1z process technology, this latest version of GDDR6 enables up to 512GB/s system performance for demanding applications like gaming and graphics. Today’s announcement continues Micron’s rich history of innovation and collaboration with industry leaders to deliver breakthrough performance that enables the most advanced gaming solutions.
“Radeon RX 6000 Series graphics cards were built to deliver high-performance, no-compromises gaming experiences, and the addition of Micron memory to the product line will help us meet that objective,” said Scott Herkelman, corporate vice president and general manager of the Graphics Business Unit at AMD. “Micron has a strong history of developing advanced memory products, and we worked closely with their engineering team to optimize GDDR6 for RDNA 2 architecture-based graphics cards, giving our board partners more choice and flexibility to produce additional designs for gamers.”
Is Micron a buy right now?:
For the past half year, Micron shares have been trending downwards, however this has changed in November. The shares trended downwards due to a difficult pricing environment for its PC memory products, and macro developments have had their part to play in the downtrend (‘mostly the supply chain issues behind a lack of non-memory components which has led to some customers cutting back on memory and storage purchases’).
Micron has recently stated that over the next 10 years, it intends on spending $150 billion (combined) on Global Manufacturing and R&D. Needham analyst Rajvindra Gill believes this plan has brought questions of “potential over-capacity issues and whether a plan like this would be a large drag on free cash flow.”
Micron believes that “secular growth drivers” such as 5G and AI use cases should see increasing demand for DRAM and NAND. I covered this in the ‘Higher future DRAM demand and how this affects Micron’ section of my DD. Thus I think Micron is justified in this belief and spending plan. Gill thinks it’s a good move, and worries are overblown.
‘“The current spending plan,” said the 5-star analyst, “When annualized and put into context, is nothing out of the ordinary and should neither cause significant increases in industry capacity (so there should be no resulting price wars from the competition) nor be a significant drag on free cash flow, which would continue to grow and reach historical highs as a % of sales.”’
Gill agrees with Micron, in that continued demand for DRAM and NAND based on 5G/AI drivers is important to focus on.
“In fact, Gill thinks the company will have enough free cash flow to provide it with a “high level of capital return flexibility,” which during cyclical sell-off periods, for example, could see the company repurchase shares. Additionally, should the need arise for “competitive reasons,” it will also provide a “safety buffer” for more R&D or CapEx spending.”
Gill reiterated a Buy rating for MU stock with a $130 price target. 14 other analysts join Gil on the bull list, with another 6 holds and 1 sell, the stock has a moderate buy consensus rating (as of Oct 27 2023, I’ll add more recent figures in the following section).
WSJ Analyst Ratings TipRanks Analyst Ratings MarketBeat Analyst Ratings
Has Micron Run Its Cyclical Course?:
I will be heavily sourcing from this great and recent Nasdaq article for this section.
‘On the face of it, year-to-date, Micron’s stock price is almost at the same level. However, its stock has been on a 2023 roller-coaster ride. It opened 2023 at $77.42, and hit $95.3 in the first week of April. Since then, the stock steadily fell until it hit $67-levels in October. It spent time consolidating in October before starting to rise again.’
This fall is due to Micron’s cyclical nature of business. The stock moves based on the demand/supply for memory. ‘When the world needed semiconductors, the stock moved up. Now, as the world is slowly opening up, there was a fall in its stock price. However, Micron stock seems to have bottomed out.’
The company has beaten earnings expectations in the last four quarters (each of), the company has delivered profits and has not disappointed investors.
‘Micron Technology president and CEO Sanjay Mehrotra said that the demand outlook for 2023 was strong, and Micron would continue to deliver innovative solutions. For the first quarter of fiscal 2023, the company’s guidance is $7.65 billion in revenue, with a gross margin of 46%.’
A June report by Global Market Insights states that semiconductor memory market revenue will cross $180 billion by 2027. It said, “The growing uptake of Dynamic Random-access Memory (DRAM) in gaming consoles, PC hardware, and high-performance computing devices will support the industry growth.”
Micron has stated that memory and storage are a growing portion of this industry, representing approximately 30% of the semi market. The company also stated that government support would be crucial for its expansion plans, as memory manufacturing in the US costs around 35%-45% more compared to lower cost markets. ‘Funding to support new semiconductor manufacturing capacity is a must, said EVP of Global Operations Manish Bhatia. He added, “Sustained government support is essential for Micron to ensure a resilient supply chain and reinforce technology leadership for the long term.”’
‘The top three companies in the sector invest billions of dollars every year to manufacture chips. These chips are increasingly getting more complicated and expensive with every passing generation. It is very unlikely that price wars will break out over market share. The game will be played on quality.’ Refer to my section about GDDR6X memory, Micron is delivering TOP quality.
Investors (regards) will have to accept that the company stock price is generally going to be volatile, due to its cyclical nature. However you can take comfort in the fact that the lows/highs for the stock will generally move up. ‘The company has realized this and has purchased 15.6 million shares of its common stock for $1.2 billion during the fiscal year of 2023.’ Here is a useful article explaining the volatility of MU this past month.
‘Tipranks’ Stock Forecast Tool indicates 15 out of 22 analysts have given MU a Buy rating, while six analysts have a Hold rating on the stock and just one has a Sell rating on the stock.
The average Micron price target is $96.09, which indicates 24.2% upside potential.’ ‘A number of equities analysts recently commented on the company. Barclays decreased their target price on Micron Technology from $110.00 to $87.00 and set an “overweight” rating for the company in a report on Wednesday, September 29th. JPMorgan Chase & Co. decreased their target price on Micron Technology from $140.00 to $100.00 and set an “overweight” rating for the company in a report on Friday, September 24th. UBS Group decreased their target price on Micron Technology from $95.00 to $90.00 and set a “buy” rating for the company in a report on Wednesday, September 29th. Morgan Stanley restated a “hold” rating and set a $75.00 target price on shares of Micron Technology in a report on Wednesday, September 29th. Finally, The Goldman Sachs Group decreased their target price on Micron Technology from $104.00 to $88.00 and set a “buy” rating for the company in a report on Thursday, October 14th. One equities research analyst has rated the stock with a sell rating, eight have assigned a hold rating, twenty-three have assigned a buy rating and two have assigned a strong buy rating to the company’s stock. Based on data from MarketBeat.com, the stock has an average rating of “Buy” and an average target price of $103.31.’
Upcoming Quarterly Sales/Next Earnings:
Analysts expect that Micron will report $7.66 billion in sales for the current quarter, according to Zacks Investment Research. The highest sales estimate of 6 is $7.67 billion, and the lowest is $7.65 billion. Micron posted sales of $5.77 billion during the same quarter last year, indicating YoY growth of 32.8%. Next earnings date is Monday, December 20th. On average, analysts expect full-year sales of $31.34 billion (for the current financial year). For the next fiscal year, analysts forecast reported sales of $35.60 billion on average. Micron last issued its earnings results on Monday, September 27th. “ The semiconductor manufacturer reported $2.42 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $2.33 by $0.09. The business had revenue of $8.27 billion during the quarter, compared to analyst estimates of $8.21 billion. Micron Technology had a return on equity of 15.98% and a net margin of 21.16%. Micron Technology’s revenue for the quarter was up 36.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $1.00 earnings per share.” I could write way more for this DD. But for the sake of keeping it shorter, I am now moving into the TA, Options and Conclusion sections Technical Analysis I defer to Tradingview and other sources for this section.
Tradingview TA overviews: 1 day 1 week 1 month
Most recent TA from Tradingview ideas:
this chart is beautiful – Nov 19: “very nice rally after a downtrend breakout here on MU ! today we are approaching a big resistance zones on the RSI and chart.
We can break resistance and continue a rally to all time high next week, but I think we will most likely see a few more weeks of consolidation first so the RSI can cool off. “
MU Long setup – Nov 18: “MU after correction, going for final push for W-1 of W-5”
MU TRADE IDEA – Nov 16: “Upside looks limited from here. Expecting us to pullback into a corrective wave 2 into a very buyable dip around $70. Be patient on this one, it’s only getting started” My gut says this guy is incorrect tbh, given the recent push.
After 200 days we can see a breakout – Nov 12, very in-depth: “Today we will take a look at Micron Technology , a company that engages in the provision of innovative memory and storage solutions. Time to check the Technical elements on the chart:
- From 2018 until November 2020 the price was inside a massive range until we saw the breakout of it and a 50% bullish movement from that situation towards the top of the bullish impulse
- From April until today the price has been consolidating on a clear corrective pattern where we can define both top and bottom edges
- How can we know that the structure is finished? Two reasons here: first we have clear edges (previous item) and second the structure has made contact with a key level, in this case, the ascending trendline.
- Now we have a breakout of the corrective pattern. Remember that Technical Analysis is a statistical discipline, which means that we are never gonna have certainty about a situation. However, we know that if we engage in quality situations over certain periods, we will be able to observe consistent results.
- We are not taking setup on this stock, (we already have exposure on other assets). However, it’s an interesting situation to wait for a throwback (retest of a broken structure). IF that happens, we have defined an activation level as you can see on the chart (ALWAYS ABOVE THE TRENDLINE)
- Depending on how aggressive is the setup you are taking, the invalidation level can be: FIRST below the whole structure 65.00 / SECOND below the throwback (this setup provides a massive risk to reward ratio, however, is prone to a quick stop loss)
- Targets: IF I would be executing a setup here, I would protect my setup once the price reaches the previous top, which shares a major resistance zone that you can see on the weekly chart (2% below that, I want to be risk-free) / Now, the places to close setups on profit can be the first or 2nd Fibonacci extension . The expected duration of a movement like this may be between 200 to 300 days.
8)RISK: This is the formula I use to trade: I never have more than 5 setups at the same time NEVER EVER. And the maximum % of risk I take on any setup is 3% (ONLY with a STRATEGY THAT YOU HAVE a lot of EXPERIENCE WITH). Let’s understand this better, most of my setups happen on the daily chart , which means that time resolutions are between 2 weeks to 3 months. Another rule I use is that my setups must happen on uncorrelated assets example: NFLX / BTCUSD / XAUUSD / FCX / AMZN . So my worst-case scenario is losing all at the same time which means a -10% to -15%. That’s more than acceptable for me. And the most probable thing is that I would be able to open 4 to 5 new setups 1 to 2 months later. That’s why this type of trading style is so secure. Even in apocalyptic scenarios, you would face a manageable loss, and it will take you time to develop new setups (you avoid impulsive trading)”
Tickeron AI TA, copied here so you don’t have to sign up for an account. Definitely worth a read. Dated Nov 19:
“MU in upward trend: 10-day moving average moved above 50-day moving average on November 09, 2023 The 10-day Moving Average for MU crossed bullishly above the 50-day moving average on November 09, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In 9 of 9 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 90%. Chart
Micron Technology (MU) Stock Forecast, Price, News, Quote Current price $83.03 is above $80.40 the highest resistance line found by A.I. Throughout the month of 10/20/21 – 11/19/21, the price experienced a +22% Uptrend. During the week of 11/12/21 – 11/19/21, the stock enjoyed a +7% Uptrend growth.
Technical Analysis (Indicators)#
Bullish Trend Analysis The Momentum Indicator moved above the 0 level on October 26, 2023. You may want to consider a long position or call options on MU as a result. In 62 of 92 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 67%.
The Moving Average Convergence Divergence (MACD) for MU just turned positive on October 22, 2023. Looking at past instances where MU’s MACD turned positive, the stock continued to rise in 37 of 50 cases over the following month. The odds of a continued upward trend are 74%.
MU moved above its 50-day Moving Average on November 04, 2023 date and that indicates a change from a downward trend to an upward trend.
Following a +10.03% 3-day Advance, the price is estimated to grow further. Considering data from situations where MU advanced for three days, in 251 of 332 cases, the price rose further within the following month. The odds of a continued upward trend are 76%.
The Aroon Indicator entered an Uptrend today. In 194 of 254 cases where MU Aroon’s Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 76%.
Bearish Trend Analysis The RSI Oscillator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 14 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
MU broke above its upper Bollinger Band on November 19, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Micron Technology (MU) Fear & Greed Index Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 70%. During the last month, the daily ratio of advancing to declining volumes was 3.58 to 1.
The Tickeron Price Growth Rating for this company is 12 (best 1 – 100 worst), indicating outstanding price growth. MU’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 16 (best 1 – 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 54, placing this stock better than average.
The Tickeron Valuation Rating of 48 (best 1 – 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.114) is normal, around the industry mean (8.460). P/E Ratio (16.155) is within average values for comparable stocks, (56.412). Projected Growth (PEG Ratio) (1.004) is also within normal values, averaging (2.068). MU has a moderately low Dividend Yield (0.001) as compared to the industry average of (0.014). P/S Ratio (3.420) is also within normal values, averaging (34.716).
The Tickeron Seasonality Score of 50 (best 1 – 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 61 (best 1 – 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 77 (best 1 – 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.”
’I’m a regard that wants to YOLO options, what do I do?:
Disclaimer: I have a good history with options, but I only trade (for the most part) 1 month, or 6 month options, or 1 year or 2 year LEAPS. I would advise to go for LEAPS and shares for this stock – either ITM or slightly OTM. If it becomes ITM, you can always roll to a higher strike if you wish.
High-risk: Be regarded and YOLO to play earnings on December 20th. I would suggest either buying ITM 80c or slightly OTM 85c for December 23 or December 31st. 90c if you like crayons.
Medium risk: Buy 80c, 82.5c, 85c for April, June, July or September. Or if you’re regarded 87.50 and 90c.Play on the thesis that MU has a lot of value, will do well in December earnings (maybe), has great products, and that the downtrend is beginning to turn into an uptrend as I believe. I would suggest buying shares also.
Low(ish…they’re still options) risk: Buy 80c or 82.50c for Jan 2023, June 2023 or Jan 2024. Medium/low risk is 85c. Medium/low risk but still regarded is 90c. Even better would be to buy warrant options.
Medium/low risk: Buy 80c or 82.5c for 2023 and LEAPS for 2023/2024. Maybe warrants, if that is possible for you. Also buy shares.
My position: I’m a Europoor with a small account. I got up to $8000 from $1500 (largely AMD and NVDA gains) this year but I had to spend it on life shit. So I’ve started agan from $336, up to $551 now from NVDA and FB calls, as well as some daytrading.
I have $72 in 12.21 86c warrant options bought in European pre-market, buying more calls (different dates) at open. I hope my small position assures you this is not a P&D (I hate them), I simply love writing DDs and am trying improve my skill at them (and share my in-depth research). I’ll post a screenshot when I open my other positions.
Where should I enter? (options or shares):
Look out for a mini-dip on Monday or sometime next week. Enter there. Consider using DCA to get a better average cost over multiple dips.
Conclusion:
I think this DD speaks for itself. Micron has great drivers/catalysts to drive the price upwards. It is investing heavily in itself. Nvidia is dependent on them. I am very bullish on MU after doing this research. I will try to open a position of LEAPS and shares as soon as I have the funds.
TL;DR:
- MU bounced on Friday, perhaps this is the sign that its downtrend is reversing.
- Higher future DRAM demand will push up Micron. DRAM is used in Smartphones, Data centres, PC/Gaming, Automotive, Industrials and Consumer Electronics. Increased demand in these sectors will drive up Micron’s value.
- Nvidia uses Micron memory in it’s data centre GPU’s.
- Nvidia’s ONLY supplier of GDDR6X memory used in higher-end gaming GPU’s is Micron. Nvidia is dependent on them for this high-performance memory.
- AMD are using Micron GDDR6(not X) memory in their RX 6000 series GPU’s.
- Micron’s downtrend has changed in November.
- Micron intends to spend $150 billion combined on Global Manufacturing and R&D.
- $130 price target from Needham analyst Rajvindra Gill.
- Micron moves based on the supply/demand for memory.
- Micron may have bottomed out now, and is due to go up.
- ‘Tipranks’ Stock Forecast Tool indicates 15 out of 22 analysts have given MU a Buy rating, while six analysts have a Hold rating on the stock and just one has a Sell rating on the stock. The average Micron price target is $96.09, which indicates 24.2% upside potential.
- Analysts expect that Micron will report $7.66 billion in sales for the current quarter, according to Zacks Investment Research. The highest sales estimate of 6 is $7.67 billion, and the lowest is $7.65 billion. Micron posted sales of $5.77 billion during the same quarter last year, indicating YoY growth of 32.8%. Next earnings date is Monday, December 20th.
- On average, analysts expect full-year sales of $31.34 billion (for the current financial year). For the next fiscal year, analysts forecast reported sales of $35.60 billion on average. Micron last issued its earnings results on Monday, September 27th. “ The semiconductor manufacturer reported $2.42 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $2.33 by $0.09. The business had revenue of $8.27 billion during the quarter, compared to analyst estimates of $8.21 billion. Micron Technology had a return on equity of 15.98% and a net margin of 21.16%. Micron Technology’s revenue for the quarter was up 36.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $1.00 earnings per share.”
