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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Micron Technology, Inc. (XNAS:MU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MU
Name:
MICRON TECHNOLOGY, INC. (XNAS:MU)
Sector:
673.00M
Industry:
Semiconductors
CEO:
Mr. Sanjay Mehrotra
Total Employees:
43,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -135.78% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MICRON TECHNOLOGY, INC.(MU) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
56.33
One Month Price Target:
$56.74
Six Month Price Target :
$58.77
Likely Price in One Year's Time:
Ticker:
$61.21
Likely Trading Range Today Under (Normal Volatility)
$56.07
Price Upper limit ($) :
$56.66
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$52.79
This week:
$48.41
This month :
$40.49
Other Primary facts
Market Cap:
60.93B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.10B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.12%
-19.82%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$72.77
$65.21
$39.89
$47.45
Medium risk (<10%) entry points
Buy Call
Sell Call
$62.75
Buy Put:
Sell Put:
$61.14
$49.89
$51.52
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MU
Sharpe Ratio:
1.90%
Comparison:
MU, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -38.62% lower than the industry
& is -16.62% lower than the market/S&P 500 average
Average Returns/Yield of
MU
Daily returns:
0.07%
Weekly returns:
0.34%
Monthly returns:
1.35%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -49.16% below industry average
Classification:
MU, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.51
Statistical test of Returns:
MU has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.10%
Weekly Volatility:
6.92%
Monthly Volatility:
13.84%
Yearly Volatility:
47.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.44%
Volatility in last five trading days has been -53.54% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.29%
Weekly VaR:
-14.06%
Monthly VaR:
-28.13%
How Much Can the price of
MU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$42.75
This translates to price declining to:
$8.45
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MU is a 98.53% riskier investment compared to the market/S&P 500 & is 70.08% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -12.78% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MU
Beta in relation to market/S&P 500--1.29
Expected beta in 1 year's time:
0.957
Expected beta in 3 year's time:
1.353
Unlevered (debt free) Beta:
1.124
Beta in relation to Nasdaq (XNAS):
1.254
Beta in relation to all global stocks::
0.883
Beta Comparison & Analysis
Beta of competitors/peers::
1.492
Beta is -13.66% lower than peers
Average Industry Beta:
1.41
Beta is -8.68% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.53%
Sustainable growth rate is -40.22% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.043
Alpha is -77.68% below industry average alpha yield
Alpha is 272% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MU
Equity cost of capital:
0.120
Equity cost of capital is -6.55% below industry mean WACC
Unlevered (without debt) cost of capital:
10.45%
Before-tax cost of debt:
2.53%
After-tax cost of debt:
2.00%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
2.00%
WACC is 3.19% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$29.36
Revenue growth rate per share of (3Y):
1.35
Annual revenue growth rate is -121.17% below industry average
EPS:
$7.94
Expected Annual growth rate of EPS (3Y):
11.88%
Expected future EPS growth rate is -77.22% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$4.47
-
-
Debt per share
$6.73
EBITDA per share
$16.34
Valuation Analysis Today of
MU
P/E Ratio:
6.42
P/E Ratio of Competitors/Peers:
206.36
P/E ratio is -96.89% lower than main peers & is -84.51% lower than the industry
Stock price/value with industry average P/E ratio: $329.33
MU is -82.90% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $78.25
Present value of the expected future dividends only: $2.51
P/S (Price to Sales ratio):
1.92
Price to sales ratio is -76.40% below the industry mean
P/B (Price to book value ratio):
1.35
Price to free cash flow: 12.62
Price to free cash flow ratio is -58.27% lower than the industry
Net income growth rate (3Y):
-57.35%
Net income growth rate is 0.12% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 1.13%
Dividend yeild: 0.53%
Previous Dividend: $0.10
Previous adjusted dividend: $0.10
Previous Dividend: $0.30
-
-
Average dividend payment (long-term): $0.10
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 25/07/2022
Expected next dividend record date: 07/11/2022
Expected next dividend declaration date: 27/06/2022
Previous dividend payment date: 26/04/2022
Previous dividend record date: 04/11/2022
Previous dividend declaration date: 29/03/2022
Dividend History:
2022-04-08--$0.10
2021-09-30--$0.10
--$0.00
2021-12-31--$0.10
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
16.18%
Net debt to equity ratio:
-2.47%
Debt to assets ratio:
12.13%
Net debt to assets ratio:
-1.85%
Debt-to-asset ratio is -68.89% below industry average
Ability to repay debt:
Interest coverage ratio:
94.36
Interest coverage ratio is 187.82% more than industry average
Looking forward:
Debt growth rate:
1.45%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 20.79%
Analysis of Key Statistics
Correlation of price movement with the market:
0.72
Statistical significance of correlation:
MU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 14.71% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.008
Covariance of price movement with the market:
0.014
Kurtosis
3.593
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.199
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MU
Gross Profit Margin Ratio:
188%
Operating Profit Margin Ratio:
34.38%
Operating profit margin is 46.13% higher than the industry
Net Profit Margin Ratio:
188%
Effective Tax Rate:
9.70%
Effective tax rate is -35.73% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.60%
Return on equity (ROE) is -24.47% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.19%
Return on assets (ROA) is 22.98% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
3.1
Current ratio is -23.65% below industry average
Cash Conversion Cycle (days):
49.9
Cash conversion cycle is -9.62% below industry average
The remaining useful life of property plant & equipment is: 26.2 years
Stock based compensation to net income ratio:
1.19%
In-depth Efficiency Analysis
Revenue generated per employee:
753.2K
Each employee generates 22% more revenue than industry average revenue per employee
EBITDA generated per employee:
419.1K
Each employee generates 80% more EBITDA than industry average revenue per employee
Profit generated per employee:
230.6K
Each employee generates 43% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.7K
Each employee generates -44% less free cash flow than industry average revenue per employee
Assets/Capital per employee
954.8K
Each employee generates -44% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 2.42%
Growth rate in R&D investment/expenditure is -82.89% lower than the industry
Competitors/Peer firms of
MU
LAM RESEARCH CORPORATION (XNAS:LRCX)
ANALOG DEVICES, INC. (XNAS:ADI)
APPLIED MATERIALS, INC. (XNAS:AMAT)
FISERV, INC. (XNAS:FISV)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
KLA Corporation (XNAS:KLAC)
WORKDAY, INC. (XNAS:WDAY)
COINBASE GLOBAL, INC. (XNAS:COIN)
NXP Semiconductors NV (XNAS:NXPI)
Current Analyst Ratings
Strong buy�33%
Buy�83%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
6/2/22
Revenue:
32.39B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
17.20B
15.19B
2.98B
-
1.02B
-
13.00M
4.02B
51.00M
191.00M
6.86B
18.02B
11.14B
9.92B
10.95B
1.06B
9.92B
Statement of Cash Flow
Date:
Period:
1.67B
Differed Income Tax :
54.00M
Stock Based Compensation :
118.00M
Change in Working Capital :
- 265000.00K
Accounts Receivables:
67.00M
Other Working Capital:
54.00M
Other Non-Cash Items:
54.00M
Net Cash Provided by Operating Activities:
3.94B
Investments in PP&E:
- 3265000.00K
Net Acquisitions:
893.00M
Purchases of Investments:
- 528000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/2/21
2022
Q1
8.68B
900.00M
9.58B
5.25B
4.83B
534.00M
20.19B
35.73B
1.23B
347.00M
1.82B
746.00M
1.19B
41.06B
3.54B
61.25B
1.90B
118.00M
448.00M
-
4.50B
6.51B
7.43B
632.00M
8.83B
-
15.34B
122.00M
41.27B
- 91000.0K
4.61B
December 2, 2021 at 7:00:00 AM
21.22B
45.91B
61.25B
2.72B
7.55B
- 1135000.0K
437.00M
- 22000.00K
- 2485000.00K
- 1949000.00K
-
- 259000.00K
- 112000.00K
1.81B
- 513000.00K
- 6000.00K
934.00M
8.76B
7.83B
3.94B
- 3265000.00K
673.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MU
2023
2024
2025
2026
2027
$61.52
$555.01
$603.05
$655.24
$711.95