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Micron (MU) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Micron (MU) closed at $46.82 in the latest trading session, marking a +1.04% move from the prior day. This change outpaced the S&P 500's 0.82% gain on the day. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 0.59%.

Wall Street will be looking for positivity from MU as it approaches its next earnings report date. This is expected to be June 29, 2020. On that day, MU is projected to report earnings of $0.72 per share, which would represent a year-over-year decline of 31.43%. Our most recent consensus estimate is calling for quarterly revenue of $5.25 billion, up 9.65% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.38 per share and revenue of $20.54 billion, which would represent changes of -62.52% and -12.26%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MU. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 13.47% higher. MU is currently a Zacks Rank #2 (Buy).

In terms of valuation, MU is currently trading at a Forward P/E ratio of 19.48. Its industry sports an average Forward P/E of 19.48, so we one might conclude that MU is trading at a no noticeable deviation comparatively.

We can also see that MU currently has a PEG ratio of 1.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor Memory stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Semiconductor Memory industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 5, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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