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Idaho-based Micron Technology is a worldwide providers of semiconductor memory solutions.

Through global brands, namely Micron, Crucial and Ballistix, Micron manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory (DRAM), NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. Its solutions are used in leading-edge computing, consumer, networking and mobile products.

A major portion of the revenues is derived from DRAM sales. The company's mission is to be the most efficient and innovative global provider of semiconductor memory solutions.

Micron reported revenues of $15.54 billion in fiscal 2023

Fundamental numbers:

• Weighted Alpha – + 113.80
• Market cap – $129B
• 5 day change – +26.17
• EPS: -3.63
• Annual sales (2023) – $15.5B
• Annual income (2023) – (-5.8B)
• Q1 24 earnings:
  • Revenue: $5.82 billion vs analyst estimates of $5.35 billion (8.8% beat)
  • EPS (non-GAAP): $0.42 vs analyst estimates of –$0.24 ($0.66 beat)
  • Revenue Guidance for Q2 CY2024 is $6.6 billion at the midpoint, above analyst estimates of $6.00 billion
  • Gross Margin (GAAP): 18.5%, up from -32.7% in the same quarter last year
  • Free Cash Flow was –$29 million compared to –$395 million in the previous quarter

The not so good

• P/E: -34,5x
• Profit margin: -20.6 %
• Earnings: -3.7B

The change in trend

Summary

Micron’s better-than-expected Q1 performance reflects gains from improved market conditions, strong sales executions and double-digit growth across multiple business units. The positive impact of inventory improvement in the data center, as well as stabilization in other markets, such as automotive, industrial and others, have also contributed to its results. It anticipates the pricing of Dynamic Random Access Memory (DRAM) and NAND chips will keep increasing next year, hence improving its revenues. The pricing benefits will primarily be driven by rising AI server causing a scarcity in the availability of cutting-edge DRAM and NAND supply. The 5G adoption in the Internet of Things devices and wireless infrastructure is likely to spur demand for memory and storage.

Profit margin (Q1 change)

MU's cash burn is expected to be positive in the next year ($8.56B), even accounting for increasing cash burn (158.72%)

Asset to liabilities

• MU's short-term assets ($23.44B) exceed its short-term liabilities ($6.26B)
• MU's short-term assets ($23.44B) exceed its long-term liabilities ($15.59B)

Cash Flow

SMCI's cash and short-term investments ($725.66M) can cover SMCI's cash burn ($169.23M) for at least 1 year

Forecast growth

• 68% analysts with a strong buy rating

Revenue Forecast

• MU's revenue is forecast to grow at an exceptional rate of 35.97% per year

More projections on sales growth and EPS

Growth projections compared to industry and market

Notable pointers:

• Micron Technology's recent quarter performance surpassed expectations due to better market conditions, effective sales, and growth in several business units, marking a rebound from previous industry slumps. The revenue increase is linked to improved data center inventory and stability in markets like automotive and industrial. With an expected rise in memory chip demand in 2024, particularly for DRAM and NAND chips driven by AI server demand, Micron predicts higher chip prices, which should boost future revenues.
• Micron is experiencing growth from the widespread use of DRAM and NAND chips in PCs, servers, smartphones, and SSDs. The company anticipates continued demand increase due to the adoption of 5G, advancements in smartphone technology, and innovations in AR/VR. Furthermore, the expanding need for memory and storage in IoT devices, wireless infrastructure, and data centers is expected to further drive demand.
• Micron is pivoting towards CXL-enabled memory products following its exit from 3D XPoint memory chip production and the sale of its Utah factory. This strategy is designed to boost computing performance and cut costs using advanced memory technology. Additionally, Micron is expanding into the SSD market, spurred by the popularity of slim laptops, tablets, and the overall increase in digital data. With the SSD market projected to hit $86.12 billion by 2030, this move could help Micron counteract any downturns in the PC market.
• Micron has solidified its market presence via strategic acquisitions, boosting its manufacturing capabilities, DRAM products, and testing services. With a healthy financial status, including about $9.7 billion in cash and investments and $12.2 billion in total liquidity, Micron is poised for further growth, strategic purchases, and enhancing shareholder value. Its strong cash flow facilitates substantial dividends and share buybacks, underscoring its financial stability and positive future prospects.

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.