MU - Embedded Expectations Analysis - 2021 08 03
Micron Technology, Inc. (MU:USA) is currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 8.5x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain muted, and management may have concerns about DRAM and NAND markets, supply chain constraints, and their debt position.Specifically, may lack confidence in their ability to sustain NAND revenue growth, reprioritize R&D investments toward CXL-enabled memory solutions, and capitalize on DRAM growth opportunities. In addition, they may be exaggerating the reliability and efficiency of their manufacturing operations, the potential of their DRAM scaling roadmap, and the strength of their EUV platform. Also, management may be concerned about continued supply chain constraints, their total debt position, and their divestiture of the Lehi fabrication site. Furthermore, they may lack confidence in their ability to improve capital intensity, enhance their NVMe SSD portfolio, and sustain strong overall performance, particularly in their Embedded business.
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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