Micron Technology Inc (MU)
Micron Technology (MU) is a leading manufacturer of computer memory and storage. Some of their products include DRAM, USB flash storage, and solid-state drives. While the Micron brand name isn’t the most widely known, it distributes its products under the Crucial and Ballistix brands, both of which are prominent companies within the computer component sector. Seemingly, investors are interested in Micron with mentions of this trending stock up almost 95% over the past day. With the company’s share price down 20% YTD, floating at around $76, it’s no surprise investors want to know if Micron is a good investment as it’s the perfect time to pick up some shares on the cheap.
Positives
Micron has performed impressively over 2021. Its Q4 revenue and margin beat guidance, alongside this, net income grew parabolically at 275% ($2.3 billion) and its operating cash flow rose from $3.1 billion to $3.6 billion.
Its financials weren’t the only area Micron excelled in either. Its networking and storage segments grew by around 30% and its data center endeavors broke growth records.
Although fears of material shortages as a result of the war caused the share price of computing component manufacturing companies to drop, Micron seems in a good position to succeed. Because Micron acquires its materials from diversified sources and has substantial inventory, the company seems secure for the coming months.
Despite boasting massive growth over the first two quarters of fiscal 2022, Micron’s guidance seems even more optimistic for Q3 with revenue expectations of $8.7 billion.
Furthermore, Micron is trading at a price-to-earnings of less than 10. With competitors like Nvidia closer to the 70x range, Micron could be considered somewhat undervalued.
Negatives
The semiconductor industry has been in disarray over recent months. It’s considered a cyclical industry meaning one factor can have something of a butterfly effect. Because of this, investors are worried that the market has already peaked for the current cycle.
Despite boasting excellent growth metrics, Micron earnt 73% of its revenue from a single sector; DRAM. While the demand for DRAM is unlikely to curtail anytime soon, earning almost three-quarters of your revenue from a single segment is not a sign of a well-diversified company.
Hype Asset of the Day - Conclusion
Overall, Micron Technology seems to be in a rather strong position. It’s enjoying phenomenal growth and setting internal records; both signs of a rapidly growing business. With the company’s share price still down almost 20% YTD and mentions up 95%, it seems like a great time to build a Micron position for a medium to long-term play. If you’re interested in getting more trending stocks delivered straight to your inbox, check out our premium plans, or if you’d like to learn more about the services offered by HypeIndex, head over to the FAQ page.
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