MU - Embedded Expectations Analysis - 2019 07 26
Micron Technology, Inc. (MU:USA) is currently trading well above recent averages relative to UAFRS-based (Uniform) Earnings, with a 24.0x Uniform P/E. However, even at these levels, markets are pricing in bearish expectations for the firm, and management has concerns about revenue, margins, and demand.Specifically, management is confident that their Q3 revenue was impacted by their inability to ship to Huawei, and they are also confident on the shipment quantities declined compared to the previous quarter. Moreover, they appear concerned about sustained revenue headwinds in their Compute and Networking business unit, and may lack confidence in their ability to meet Q4 revenue and operating margin guidance. Additionally, they may be exaggerating expectations for future demand improvement, and may be concerned about the sustainability of recent growth rates in their SSD shipments.
Micron Technology provides memory and storage solutions. The company's portfolio of memory and storage technologies include Dynamic Random Access Memory, Not And, 3D XPoint? memory, and Not Or. The company's segments are: Compute and Networking Business, which includes memory products sold into client, cloud server, enterprise, graphics, and networking markets; Mobile Business, which includes memory products sold into smartphone and other mobile-device markets; Storage Business, which includes Solid-State Drives and component-level solutions sold into enterprise and cloud, client, and consumer storage markets; and Embedded Business, which includes memory and storage products.
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