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

Zacks Equity Research
·3 min read

Micron (MU) closed at $55.96 in the latest trading session, marking a +1.45% move from the prior day. This change outpaced the S&P 500's 1.17% gain on the day. Elsewhere, the Dow gained 2.95%, while the tech-heavy Nasdaq lost 1.53%.

Coming into today, shares of the chipmaker had gained 10.54% in the past month. In that same time, the Computer and Technology sector gained 8.29%, while the S&P 500 gained 4.58%.

MU will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.47, down 2.08% from the prior-year quarter. 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.

It is also important to note the recent changes to analyst estimates for MU. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 1.66% higher. MU is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, MU currently has a Forward P/E ratio of 20.57. For comparison, its industry has an average Forward P/E of 20.57, which means MU is trading at a no noticeable deviation to the group.

It is also worth noting that MU currently has a PEG ratio of 1.48. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Memory industry currently had an average PEG ratio of 1.48 as of yesterday's close.

The Semiconductor Memory industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 249, which puts it in the bottom 2% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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