With a $58.13 billion market cap, this is a chip-making company that designs, manufactures, and sells storage products globally. It operates through the Compute and…
Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit.
Popular chipmaker NVIDIA Corporation (NVDA) provides graphics and Compute & Networking solutions in the United States, Taiwan, China, and internationally. It has a market capitalization of $322.191 billion. The company is credited with the invention of GPUs, which is a cornerstone of modern gaming software.
In a similar fashion, Micron Technology, Inc. (MU) offers DRAM products, which are dynamic random access memory semiconductor devices that provide high-speed data retrieval. The devices are used widely in data centers, personal computers, and other devices.
Recently, MU broke ground for a $15 billion factory in Boise, Idaho. The company also announced another plant to be built in the United States. Once operational, U.S. plants are expected to account for 40% of MU’s DRAM production volume globally, up from 10% at present. The company had previously stated that it would invest $150 billion throughout the decade, which includes funds for research and development.
The stock has declined 18.6% over the past month and 8.3% over the past five days to close its last trading session at $52.69.
Here are the factors that could affect MU’s performance in the near term:
Solid Financials
For the fiscal third quarter that ended June 2, MU’s revenue increased 16.4% year-over-year to $8.64 billion. Non-GAAP operating income rose 33% from the prior-year quarter to $3.14 billion. Non-GAAP net income and non-GAAP EPS improved 35.3% and 37.8% from the same period the prior year to $2.94 billion and $2.59.
Low Valuations
In terms of its forward non-GAAP P/E, MU is trading at 6.39x, 64% lower than the industry average of 17.76x. Its forward EV/EBITDA multiple of 3.20 is 74.6% lower than the industry average of 12.59. In terms of its forward Price/Cash Flow, it is trading at 3.94x, 76.5% lower than the industry average of 16.76x.
Wide Profit Margins
MU’s trailing-12-month EBIT margin and…
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