Memory and storage solutions provider MICRON TECHNOLOGY INC (NASDAQ:MU) has been found using a methodical screening process made to find possible value chances. The screen looks for companies with good basic valuation scores, as decided by ChartMill's review, while also needing acceptable ratings in profitability, financial condition, and growth. This method fits with value investing ideas, which try to find stocks trading for less than their inherent value and also having sound operational basics.
Valuation Assessment
The company's valuation numbers show a strong case for investors looking for fairly priced chances in the semiconductor field. MICRON TECHNOLOGY INC gets a valuation rating of 7 out of 10, showing good pricing compared to both industry rivals and wider market measures.
- The forward Price/Earnings ratio of 13.97 is much lower than the industry average of 36.14 and is also under the S&P 500 average of 31.86
- The Enterprise Value to EBITDA ratio places the company as less expensive than 80% of its semiconductor industry rivals
- Even though a normal P/E ratio of 28.75 seems high, the PEG ratio, which includes growth outlooks, indicates the stock could be priced low when thinking about its growth path
For value investors, these numbers are important as they help find the difference between market price and inherent value, especially when forward-looking measures and growth-adjusted ratios point to more appealing pricing than what basic numbers show.
Financial Health and Stability
With a health rating of 5 out of 10, MICRON TECHNOLOGY INC shows acceptable financial steadiness, but some parts need watching. The company keeps a balanced capital structure with a Debt/Equity ratio of 0.26, showing careful leverage compared to equity. Liquidity is good with a Current Ratio of 2.52, giving enough cover for short-term debts. The Altman-Z score of 7.52 points to low bankruptcy danger, doing better than 67% of industry rivals. Still, investors should see that the Return on Invested Capital is now below the company's cost of capital, showing some lack of efficiency in making value from invested money.
Profitability Strength
The company's profitability rating of 7 out of 10 points out operational effectiveness and good margins within the semiconductor industry. MICRON TECHNOLOGY INC reaches high returns on both assets (10.31%) and equity (15.76%), doing better than about 80% of industry rivals. The firm's Profit Margin of 22.84% and Operating Margin of 26.39% are some of the best in the industry, beating 86% of peers. These margins have gotten better in recent years, showing management's skill in turning revenue into final profits, but the Gross Margin of 39.79% is lower than 61% of industry rivals.
Growth Trajectory
MICRON TECHNOLOGY INC does very well in growth with a rating of 8 out of 10, pushed by large increases across important financial numbers. The company has given very high Earnings Per Share growth of 553% over the last year, along with strong revenue growth of 49%. Past performance shows steady strength with EPS growing at an average yearly rate of 24% and revenue getting larger at 12% each year over recent years. Future estimates show continued growth with EPS expected to rise 11% per year and revenue growing at 10% each year, giving a good base for future valuation increases.
Investment Considerations
The mix of fair valuation, good profitability, and very high growth makes MICRON TECHNOLOGY INC a noteworthy option for value-focused investors. The company's place in the active semiconductor industry, especially with products allowing progress in artificial intelligence and compute-heavy uses, gives contact to long-term technology movements. While the financial health score shows some parts that could get better, the total basic picture indicates a company trading at good levels considering its growth chances and operational effectiveness.
For investors looking for similar chances, more screening results can be viewed using the Decent Value Stocks screening methodology.
Disclaimer: This analysis is based on fundamental data and screening methodologies for informational purposes only. It does not constitute investment advice, and investors should conduct their own research and consider their individual financial circumstances before making investment decisions. Past performance does not guarantee future results, and all investments carry risk, including potential loss of principal.
