Although the benchmark stock indexes rallied following the Federal Reserve’s interest rate increase by half a percentage point on Wednesday, worries over the potential for further…
monetary policy tightening and intensifying supply chain disruptions to push the economy into recession weighed heavily on market sentiment yesterday. The major benchmark indexes saw their worst losing day this year. The Wall Street fear gauge CBOE Volatility index has increased more than 100% year-to-date.
Since technology has been one of the worst-hit sectors, many high-quality tech stocks have now entered oversold territory. However, a growing reliance on tech products and solutions and increasing corporate and government investments to encourage the development of next-generation or efficient products should keep driving the industry’s growth.
Therefore, we think beaten-down tech stocks Micron Technology, Inc. (MU), Infineon Technologies AG (IFNNY), Jabil Inc. (JBL), F5 Networks, Inc. (FFIV), and Cirrus Logic, Inc. (CRUS), which have the potential to rebound soon, could be solid bets now.
Micron Technology, Inc. (MU)
MU designs, manufactures, and sells memory and storage products worldwide. The Boise, Idaho-based company operates through computer and networking, mobile, storage, and embedded business units. It sells dynamic random access memory chips (DRAMs), static random access memory chips (SRAMs), flash memory, semiconductor components, and memory modules to various end markets.
On March 22, 2022, regulated electrical power utility Idaho Power partnered with MU to facilitate the construction of a new 40-megawatt (MW) solar project. Idaho Power has asked the Idaho Public Utilities Commission (IPUC) to approve a power purchase agreement with oil & gas exploration and production company Black Mesa Energy, LLC, to develop a dedicated solar facility for MU’s renewable energy use. This project supports MU’s goal to source 100% renewable energy for its U.S. operations by the end of 2025.
For its fiscal year 2022 second quarter, ended March 3, 2022, MU’s revenue increased 24.9% year-over-year to $7.79 billion. The company’s non-GAAP gross profit came in at $3.62 billion, up 81.3% from its year-ago period. Its non-GAAP operating income came in at $2.75 billion, indicating a 118.8% rise from the prior-year period. MU’s non-GAAP net income has increased 116.7% year-over-year to $2.44 billion. Its non-GAAP EPS came in at $2.14, representing a 118.4% year-over-year improvement. As of March 3, 2022, the company had $9.12 billion in cash and equivalents.
Analysts expect MU’s EPS to grow 58.1% year-over-year to $9.58 for its fiscal year 2022, ending Aug.31, 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $33.70 billion consensus revenue estimate for the same fiscal year represents a 21.6% rise from the prior-year period. The company’s EPS is expected to grow at a 29.7% rate per annum over the next five years.
MU’s trailing-12-month gross profit margin, EBITDA margin, and ROE are 46%, 54.8%, and 20.4%, respectively. The stock has declined 4.5% in price over the past month. It closed yesterday’s trading session at $71.29, down 27.6% from its 52-week high of $98.45.
MU’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has an A grade for Value and a B grade for Growth and Quality. Click here to see the additional ratings for MU’s Stability, Sentiment, and Momentum. MU is ranked #6 of 96 stocks in the B-rated Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2022
Infineon Technologies AG (IFNNY)
Headquartered in Munich, Germany, IFNNY designs, manufactures, and markets semiconductors and related system solutions worldwide. The company offers power semiconductors, microcontrollers, security controllers, radio frequency products, and sensors. It markets its products to the automotive, industrial, communications, and consumer and security electronics sectors.
On April 12, 2022, IFNNY’s PT Infineon Technologies Batam in Indonesia announced that it had purchased real estate from PT Unisem, a member of global semiconductor assembly and test services provider Unisem Group, to expand its existing backend operations. This should help IFNNY increase its focus on the assembly and test of automotive products and strengthen its global presence.
IFNNY’s revenue for its fiscal year 2022 first quarter, ended Dec. 31, 2021, increased 35.5% year-over-year to €3.16 billion ($3.34 billion). The company’s gross profit came in at €1.31 billion ($1.39 billion), up 33.2% from the prior-year period. Its operating profit increased 85.8% year-over-year to €617 million ($651.50 million). While its adjusted net earnings increased 47% year-over-year to €532 million ($561.75 million), its adjusted EPS grew 46.4% to €0.41. The company had €2 billion ($2.11 billion) in cash and cash equivalents as of Dec. 31, 2021.
Analysts expect the company’s EPS to hit $1.87 for its fiscal 2022, ending Sept. 30, 2022, representing a 30.8% rise from the prior-year period. The $14.17 billion consensus revenue estimate for the same fiscal year indicates a 7.2% year-over-year improvement. Analysts expect IFNNY’s EPS to improve at a 20.9% rate per annum over the next five years.
IFNNY’s trailing-12-month gross profit margin, EBITDA margin, and ROE are 39.7%, 29.9%, and 12.4%, respectively. The stock has declined 9.8% in price over the past month. It ended yesterday’s trading session at $28.78, down 42.4% from its 52-week high of $49.99.
IFNNY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has a B grade for Growth, Value, and Stability. Click here to see the additional ratings for IFNNY (Quality, Sentiment, and Momentum). IFNNY is ranked #12 of 96 stocks in the Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2022
Jabil Inc. (JBL)
JBL provides electronic design and manufacturing services and solutions worldwide. The St. Petersburg, Fla., company provides systems assembly, regulatory compliance, reliability tests, direct-order fulfillment, and configure-to-order services. It serves 5G, wireless and cloud, digital print and retail, industrial and semi-cap, networking and storage, automotive and transportation, connected devices, healthcare and packaging, and mobility industries.
On April 12, 2022, JBL announced the formation of the Jabil Payment Solutions business unit to speed the development and delivery of leading-edge payment and point-of-sale (POS) platforms. Accelerated by the recent acquisition of…
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