Insights

• Micron's revenue is on a strong upward trajectory, driven by increasing demand for its memory and storage solutions, particularly in the AI and data center markets.
• The company's profitability is improving, with increasing gross and net profit margins, reflecting efficient cost management and strong pricing power.
• Micron maintains a solid liquidity position, with a current ratio above 1.0, and a moderate level of financial leverage, providing financial flexibility for future investments.
• The company's investments in capacity expansions and technology transitions are expected to drive long-term growth and profitability, but also increase capital expenditures.
• Micron faces risks related to industry cyclicality, geopolitical factors, and reliance on key customers, which could impact its financial performance.

Analysis

• Revenue - Revenue has shown a strong upward trend over the past several quarters, indicating growing demand for Micron's memory and storage solutions. - The YoY growth rate is higher than the 5-year CAGR, suggesting a potential acceleration in revenue growth, possibly driven by increased demand from AI and data center applications. - Micron's revenue growth is significantly higher than the industry average, reflecting its competitive positioning and market share gains.
  • Profitability
    • Gross Profit Margin and Net Profit Margin are showing increasing trends, indicating improved profitability.
    • The company's profitability margins are significantly higher than the industry average, reflecting its efficient cost management and strong pricing power.
    • EBIT is trending upwards, but the YoY growth rate is lower than the 5-year CAGR, suggesting a potential deceleration in operating income growth.
  • Liquidity
    • The current ratio is 3.13, indicating a strong liquidity position and the ability to meet short-term obligations.
    • The current ratio is showing a slightly decreasing trend, which could be a result of increased investments in long-term assets or strategic initiatives.
    • Micron's current ratio is lower than the industry average, suggesting that the company may have less liquidity compared to its peers, but it is still above 1.0 indicating positive liquidity.
  • Solvency
    • The total debt to total equity ratio is 30.89, suggesting a moderate level of financial leverage.
    • The total debt to total equity ratio is showing a decreasing trend, indicating that the company is becoming less leveraged.
    • Micron's debt-to-equity ratio is lower than the industry average, indicating that the company is less leveraged than its peers, providing financial flexibility.
  • Operational Efficiency
    • The company is efficiently managing its cost of goods sold, as reflected in its higher-than-average gross profit margin.
    • The company is effectively utilizing its assets to generate revenue, as indicated by its higher-than-average net profit margin.
    • The company's enterprise value to sales and enterprise value to EBITDA are lower than the industry average, suggesting that it may be undervalued compared to its peers.
  • Cash Flow Analysis - Net operating cash flow is trending upwards, driven by increases in net income and depreciation, depletion & amortization. - The cash flow / total debt ratio is increasing and is higher than the industry average, indicating that the company is generating sufficient cash flow to cover its debt obligations. - Total capital expenditure is trending upwards, reflecting the company's investments in capacity expansions and technology transitions.
  • Risk Factors
    • The semiconductor industry is highly cyclical and competitive, which can lead to volatility in average selling prices and gross margins.
    • Geopolitical and regulatory risks associated with Micron's international operations could impact manufacturing costs and product competitiveness.
    • The company relies on a limited number of key customers and end markets, which could expose it to demand fluctuations and pricing pressures.
  • Future Outlook
    • Micron is well-positioned to capitalize on the transformative growth driven by AI, particularly in the data center and edge device markets.
    • The company's investments in HBM capacity and new fabs are aimed at securing its position in the memory market for the long term.
    • Management expects continued gross margin improvement, driven by a shift in product mix towards higher-value solutions and disciplined supply management.

Benchmarks (as of 2025-04-23)

• Performance Comparison:
  • Micron Technology Inc. (MU) has generally underperformed the Technology Select Sector SPDR Fund (XLK) across most time periods. For instance, the one-year performance shows MU at -34.46% compared to XLK at 0.7%. However, in the past week, MU has outperformed XLK, with returns of 6.0% and 2.69% respectively.
• Risk and Return Analysis:
  • The annualized returns indicate that MU has provided lower returns compared to XLK over the 1, 2, and 3-year periods. For example, the 3-year annualized return for MU is 1.96%, while for XLK it is 11.83%.
  • MU exhibits higher annualized volatility compared to XLK. For example, in Q1 2025, MU's volatility reached as high as 103.66% while XLK's reached 57.02%. This indicates that MU's price fluctuates more widely than XLK's.
  • MU's maximum drawdown was -57.63% on 2025-04-04, which is significantly larger than XLK's maximum drawdown of -33.56% on 2022-10-12. This suggests that MU is riskier than XLK, as it experiences more significant declines from peak values.
• Risk-Adjusted Performance:
  • The Sharpe ratios for XLK are generally higher than those for MU, indicating that XLK offers better risk-adjusted returns. Recently, the Sharpe ratio for MU has been negative, while XLK has maintained positive Sharpe ratios.
  • MU's beta is consistently higher than XLK's, indicating that MU is more sensitive to market movements. Recently, MU's beta has been in the range of 2.15 to 2.42, while XLK's beta has been in the range of 1.39 to 1.64.
• Overall Assessment:
  • Micron Technology Inc. (MU) has underperformed Technology Select Sector SPDR Fund (XLK) across most metrics, including historical performance, annualized returns, and risk-adjusted returns. MU exhibits higher volatility and larger drawdowns, indicating a riskier investment profile compared to XLK. While MU's higher beta suggests greater sensitivity to market movements, its lower Sharpe ratio indicates that it does not compensate investors adequately for the increased risk.

Peers Price History(as of 2025-04-23)

• Performance Comparison:
  • Micron Technology (MU) has shown mixed performance compared to Intel Corp. (INTC) and Analog Devices, Inc. (ADI). Over the past year, MU outperformed INTC but significantly underperformed ADI. Specifically, MU's 1-year return was -34.46%, while INTC's was -39.7% and ADI's was -5.27%. Over a longer 2-year and 3-year period, MU outperformed INTC but underperformed ADI over 3 years. For example, MU's 2-year return was 23.84% compared to INTC's -28.87% and ADI's 1.47%. Recently, MU has underperformed both INTC and ADI year-to-date, with returns of -16.38% compared to INTC's 1.83% and ADI's -12.98%.
• Risk and Return Analysis:
  • The annualized returns indicate that MU has been more volatile than its peers. MU's annualized return for the past year was -34.46%, compared to INTC's -39.7% and ADI's -5.27%. Over a 2-year period, MU's annualized return was 11.28%, while INTC's was -15.66% and ADI's was 0.73%. The annualized volatility data shows that MU generally experiences higher volatility. For instance, in Q1 2025, MU's volatility reached 103.66%, while INTC's was 95.53% and ADI's was 78.38%. The maximum drawdown for MU was -57.63% on 2025-04-04, which is less than INTC's -66.08% but more than ADI's -32.2%. This suggests that MU carries a higher level of risk compared to ADI but less than INTC.
• Risk-Adjusted Performance:
  • The Sharpe Ratio, which measures risk-adjusted return, indicates that ADI generally offers a better risk-adjusted return compared to MU and INTC. Throughout the period, ADI consistently showed higher Sharpe Ratios. For example, in Q1 2025, MU's Sharpe Ratio was -0.8, INTC's was -0.93, and ADI's was 0.16. The Beta values for MU, INTC, and ADI were consistently above 1, indicating that these stocks are more volatile than the market. MU generally had higher Beta values, suggesting it is more sensitive to market movements.
• Overall Assessment:
  • Based on the analysis, Micron Technology (MU) presents a higher-risk, higher-reward profile compared to Analog Devices, Inc. (ADI). While MU has shown periods of outperformance, particularly over 2 and 3 year periods compared to Intel (INTC), it also exhibits greater volatility and larger drawdowns. ADI, on the other hand, offers more stable and consistent risk-adjusted returns. Investors seeking stability and lower risk may prefer ADI, while those with a higher risk tolerance and a focus on potential outsized gains may consider MU. The recent underperformance of MU and the increased volatility in the semiconductor industry suggest caution.

Peers Fundamentals(as of 2025-02-28)

1. Market Position and Size:

   • Micron Technology (MU) has a market capitalization of $81.5 billion, which is less than Intel (INTC) at $89.8 billion and Analog Devices (ADI) at $90.8 billion.
   • MU's revenue for the most recent quarter is $31.3 billion, which is less than Intel's $53.1 billion but significantly greater than Analog Devices' $9.3 billion.
   • MU's EBITDA of $14.3 billion is greater than both Intel's $6.7 billion and Analog Devices' $4.1 billion. MU's net income of $4.7 billion is greater than Intel's -$18.8 billion and Analog Devices' $1.6 billion.
   • Within its peer group, Micron Technology is smaller in terms of market capitalization compared to Intel and Analog Devices. However, its revenue is significantly higher than Analog Devices, and it demonstrates stronger profitability metrics (EBITDA, Net Income) than Intel. This suggests a strong market position in its specific niche within the semiconductor industry.

2. Profitability and Efficiency:

   • Micron Technology's Gross Profit Margin is 34.84%, which is greater than Intel's 32.66% but less than Analog Devices' 49.09%. The industry average is -40.07%.
   • MU's EBITDA Margin is 45.54%, which is significantly greater than Intel's 12.56% and slightly greater than Analog Devices' 44.01%. The industry average is -1954.9%.
   • MU's Net Profit Margin is 14.92%, which is greater than Intel's -35.32% but less than Analog Devices' 16.75%. The industry average is -1877.28%.
   • Considering its market cap and revenue, Micron Technology demonstrates strong profitability. Its EBITDA margin is particularly noteworthy, indicating efficient operations.
   • Micron Technology outperforms Intel in all profitability metrics and is generally in line with Analog Devices. Compared to industry averages, Micron significantly outperforms in all profitability metrics.

3. Financial Health and Stability:

   • Micron Technology's Current Ratio is 3.13, which is greater than Intel's 1.33 and Analog Devices' 1.93, but less than the industry average of 4.36.
   • MU's Quick Ratio is 1.99, which is greater than Intel's 0.98 and Analog Devices' 1.43, but less than the industry average of 3.57.
   • MU's Total Debt to Total Equity Ratio is 30.89, which is less than Intel's 50.84 and the industry average of 64.26, but greater than Analog Devices' 21.58.
   • MU's Debt / EBITDA is 1.01, which is less than Intel's 7.5, Analog Devices' 1.84, and the industry average of 13.03.
   • MU's Cash Flow / Total Debt is 90.68, which is greater than Intel's 14.24 and Analog Devices' 47.86, and the industry average of -476.89.
   • Micron Technology exhibits strong liquidity and a manageable debt position. Its current and quick ratios are healthy, and its debt levels are relatively low compared to its EBITDA and cash flow.

4. Valuation and Market Perception:

   • Micron Technology's Enterprise Value To Sales is 3.51, which is greater than Intel's 2.29, but less than Analog Devices' 11.83 and the industry average of 12.24.
   • MU's Enterprise Value To EBITDA is 7.66, which is less than Intel's 18.2, Analog Devices' 26.89, and the industry average of 234.75.
   • MU's Price To Earnings is 17.53, which is less than Analog Devices' 58.39 and the industry average of 67.67.
   • MU's Price to Book Ratio is 1.68, which is greater than Intel's 0.9, but less than Analog Devices' 2.59 and the industry average of 6.09.
   • MU's Price To Sales Ratio is 2.61, which is greater than Intel's 1.66, but less than Analog Devices' 9.78 and the industry average of 14.31.
   • MU's Price to Free Cash Flow is 134.5, which is greater than Intel's -5.73 and Analog Devices' 28.52, and the industry average of -179.6.
   • Micron Technology appears to be undervalued compared to Analog Devices and the industry average, based on its lower EV/Sales, EV/EBITDA, P/E, P/B, and P/S ratios.

5. Cash Flow and Capital Management:

   • Micron Technology's Net Operating Cash Flow is $13.1 billion, which is greater than Intel's $8.3 billion and Analog Devices' $3.8 billion.
   • MU's Total Capital Expenditure is $12.5 billion, which is less than Intel's $23.9 billion but significantly greater than Analog Devices' $0.7 billion.
   • MU's Free Cash Flow is $0.6 billion, which is greater than Intel's -$15.7 billion but less than Analog Devices' $3.2 billion.
   • Micron Technology demonstrates strong cash flow generation, with a high net operating cash flow. However, its free cash flow is relatively low due to significant capital expenditures.

6. Growth and Future Prospect:

   • MU shows higher average sales/revenue growth (15.4%) compared to the peer average (7.87%).
   • MU shows higher average EBITDA growth (58.55%) compared to the peer average (17.6%).
   • MU shows higher average Net Income growth (-83.71%) compared to the peer average (-110.71%).
   • MU shows higher average Basic Earnings per Share growth (-85.5%) compared to the peer average (-115.24%).
   • MU shows higher average EBIT Margin growth (-96.75%) compared to the peer average (-1086.2%).
   • MU's 5-year CAGR (9.83%) is significantly higher than its 3-year CAGR (0.16%), indicating accelerating revenue growth over the longer term.
   • MU's 5-year CAGR (12.32%) is significantly higher than its 3-year CAGR (-5.63%), indicating improving profitability over the longer term.
   • MU's 5-year CAGR (15.26%) is significantly higher than its 3-year CAGR (-19.7%), indicating improving profitability over the longer term.
   • MU's 5-year CAGR (15.15%) is significantly higher than its 3-year CAGR (-19.48%), indicating improving profitability over the longer term.
   • MU's 5-year CAGR (2.87%) is significantly higher than its 3-year CAGR (-50.04%), indicating improving cash flow generation over the longer term.
   • MU's 5-year CAGR (-6.34%) is significantly higher than its 3-year CAGR (-50.12%), indicating improving cash flow generation over the longer term.
   • MU's 5-year CAGR (8.88%) is significantly higher than its 3-year CAGR (-15.86%), indicating improving profitability over the longer term.
   • MU's growth rates have been generally increasing over the 5-year period, as evidenced by the higher 5-year CAGRs compared to the 3-year CAGRs.
   • MU's most recent year-over-year growth rates are significantly higher than its 5-year CAGRs, indicating an acceleration of growth in the most recent period.

7. Potential for Investment:

   • From an investment perspective, Micron Technology appears attractive due to its strong financial performance, efficient returns, and robust cash flow.
   • While its market capitalization is smaller than some of its peers, its superior profitability and growth potential suggest that it may be undervalued by the market.
   • Micron Technology's higher earnings per share, combined with a relatively lower P/E ratio (17.53 compared to Analog Devices' 58.39 and the industry average of 67.67), suggests that it offers better value to shareholders compared to its peers.

8. Key Risks and Considerations:

   • Micron Technology's Net Income growth shows significant fluctuations, with a standard deviation of 205.0%.
   • Micron Technology's Basic Earnings per Share growth shows significant fluctuations, with a standard deviation of 206.44%.
   • Micron Technology's Free Cash Flow growth shows significant fluctuations, with a standard deviation of 344.16%.
   • Micron Technology's Free Cash Flow Margin growth shows significant fluctuations, with a standard deviation of 280.47%.
   • Micron Technology's EBIT Margin growth shows significant fluctuations, with a standard deviation of 181.47%.
   • Micron Technology has a smaller market capitalization compared to Intel and Analog Devices, potentially limiting its influence and access to capital.
   • Despite strong operating cash flow, Micron Technology's free cash flow is lower than Analog Devices due to significant capital expenditures.
   • Micron Technology's valuation multiples, such as EV/Sales, EV/EBITDA, and P/E, are lower than Analog Devices and the industry average, suggesting potential undervaluation or market skepticism.

9. Overall Assessment:

   • Micron Technology exhibits strong financial health, characterized by high profitability, efficient returns, and robust cash flow generation.
   • While its market capitalization is smaller than some of its peers, its financial performance indicates a solid and well-managed company.
   • Micron Technology holds a strong competitive position within the semiconductor industry, particularly in its specific niche of memory and storage solutions.
   • Its superior profitability and efficiency compared to Intel, combined with its strong cash flow, position it well for future growth and market leadership.