Today we’re going to take a look at the well-established Micron Technology Inc (NASDAQ:MU). The company’s stock saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $62.62 and falling to the lows of $47.1. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Micron Technology’s current trading price of $47.11 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Micron Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in Micron Technology?
Good news, investors! Micron Technology is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $85.73, but it is currently trading at US$47.11 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Micron Technology’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Micron Technology generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 4.61% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Micron Technology, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since MU is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MU for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MU. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Micron Technology. You can find everything you need to know about Micron Technology in the latest infographic research report. If you are no longer interested in Micron Technology, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.