Micron Technology (NASDAQ:MU) Stock Analysis: A High-Growth Momentum Leader

The method used in this study joins Mark Minervini's strict Trend Template with a concentration on high-growth momentum investing. Minervini's approach is based on finding stocks in strong uptrends, verified by particular moving average arrangements, closeness to new highs, and better relative strength. This technical base is then combined with a fundamental filter for companies showing fast growth in earnings and sales, a quality that frequently comes before major price gains. The aim is to find securities that are both technically good and have the fundamental driver to maintain their upward movement, giving a structured way to find leading stocks.

Technical Strength: Following the Minervini Trend Template

A main idea of the Minervini approach is to only buy stocks showing clear technical strength, which is exactly what the Trend Template is made to find. MICRON TECHNOLOGY INC (NASDAQ:MU) now meets these strict conditions, indicating a strong and sound uptrend.

• Moving Average Arrangement: The stock's price is trading well above its main moving averages, with the 50-day SMA ($172.14) located above both the 150-day ($125.62) and 200-day ($118.15) SMAs. This layered setup is a standard sign of gaining momentum and buyer control across different time periods.
• Rising Averages: Both the 150-day and 200-day simple moving averages are in clear, upward trends, confirming the long-term positive stance of the stock.
• Closeness to Highs: The present price of $234.70 is a notable 281% above its 52-week low of $61.54 and is trading within 1.2% of its 52-week high of $237.62. Minervini states that real market leaders reach new highs, and buying strength near these points is favored over trying to buy weaker stocks at assumed lows.
• Better Relative Strength: With a ChartMill Relative Strength (CRS) rating of 96.67, MU is doing better than almost 97% of the whole market. A high RS rating is important as it distinguishes the real leaders from the general market activity, showing institutional buying and better performance.

Fundamental Strength: The Signs of High Growth

Beyond a good chart, the Minervini method looks for companies with strong fundamental bases. MICRON TECHNOLOGY INC shows the type of fast growth that high-momentum investors look for.

• Earnings Growth Speed-Up: The company is in the middle of a major earnings recovery and speed-up.
  • EPS Growth (TTM) is at a large 552.76%.
  • Quarterly growth stays very strong, with the last quarter showing a 156.78% rise year-over-year.
  • This speed-up is a main sign, indicating the company's growth is not a single event but a continuing pattern.
• Positive Earnings Surprises: MU has exceeded EPS estimates in all of the last four quarters, with an average beat of 6.34%. Steady earnings surprises often work as triggers, pushing higher analyst and institutional attention.
• Upward Revisions: Analyst positive outlook is increasing, with the average EPS estimate for next year being changed upward by 35.58% over the last three months. Upward revisions are a strong sign of growing belief in the company's future potential.
• Strong Sales Growth and Growing Margins:
  • Revenue growth (TTM) is a strong 48.85%.
  • This sales growth is moving directly to the bottom line, with the profit margin in the last quarter growing to 28.29%, up greatly from 20.27% in the previous quarter. Getting better margins show pricing ability and operational effectiveness, signs of a high-quality business.

Technical Analysis Summary

The separate technical report from ChartMill gives MICRON TECHNOLOGY INC a top rating of 10 out of 10, showing its outstanding technical condition. The report confirms the stock is in a good long-term and short-term trend and is doing better than most of the market. While the technical rating is very good, the report mentions that the recent strong price increase has resulted in a lower setup rating, indicating that new entries might be better planned during a time of pause rather than following the extended move. For a full look at the support levels and a total technical evaluation, you can see the complete technical analysis report for MU.

Find Additional High-Growth Leadership Choices

The mix of a perfect Minervini Trend Template setup and fast fundamental growth makes MICRON TECHNOLOGY INC an interesting candidate for more study. For investors looking to methodically find other stocks that fit this strong mix of technical and fundamental conditions, this High Growth Momentum + Trend Template screen can be a useful beginning for your own research.

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