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Micron (MU) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Micron (MU) closed at $61.88 in the latest trading session, marking a +0.03% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.45%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.19%.

Coming into today, shares of the chipmaker had gained 17.54% in the past month. In that same time, the Computer and Technology sector gained 3%, while the S&P 500 gained 4.41%.

Wall Street will be looking for positivity from MU as it approaches its next earnings report date. On that day, MU is projected to report earnings of $0.47 per share, which would represent a year-over-year decline of 2.08%. Meanwhile, our latest consensus estimate is calling for revenue of $5.23 billion, up 1.59% from the prior-year quarter.

MU's full-year Zacks Consensus Estimates are calling for earnings of $2.68 per share and revenue of $22.30 billion. These results would represent year-over-year changes of -5.3% and +4.03%, respectively.

Any recent changes to analyst estimates for MU should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.38% lower within the past month. MU is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, MU currently has a Forward P/E ratio of 23.06. Its industry sports an average Forward P/E of 23.06, 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 1.65. 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 1.65 based on yesterday's closing prices.

The Semiconductor Memory industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 248, which puts it in the bottom 3% 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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