MU - Embedded Expectations Analysis - 2021 05 07
Micron Technology, Inc. (MU:USA) is currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 12.4x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain muted, and management may have concerns about revenue growth, the DRAM and NAND market outlook, and declines in capex spendSpecifically, management may lack confidence in their ability to improve their storage business unit, SSD, and component revenues, sustain margin expansion from DRAM price increases and cost declines, and maintain EBITDA margin growth. Furthermore, they may have concerns about the sustainability of SSD cost of ownership benefits, price elasticity in DRAM, and their investments in Compute Express Link memory solutions. Moreover, management may be exaggerating the strength of the DRAM and NAND market outlook as well as the pace of the mobile phone market recovery. Also, they may be concerned about their share repurchase activity, their redeployment of 3D XPoint R&D, and overall capital spending declines. Finally, management may lack confidence in their ability to accelerate their water conservation efforts and reduce net interest expenses
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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