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

Zacks Equity Research

Micron (MU) closed at $47.49 in the latest trading session, marking a -0.59% move from the prior day. This change lagged the S&P 500's 0.74% gain on the day. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 1.11%.

Heading into today, shares of the chipmaker had gained 25.48% over the past month, outpacing the Computer and Technology sector's gain of 4.95% and the S&P 500's gain of 3.18% in that time.

MU will be looking to display strength as it nears its next earnings release. On that day, MU is projected to report earnings of $0.46 per share, which would represent a year-over-year decline of 86.97%. Meanwhile, our latest consensus estimate is calling for revenue of $4.50 billion, down 46.69% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.22 per share and revenue of $23.04 billion, which would represent changes of -47.95% and -24.2%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MU. These revisions help to show the ever-changing nature of 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 1.82% higher. MU is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that MU has a Forward P/E ratio of 7.68 right now. Its industry sports an average Forward P/E of 7.68, so we one might conclude that MU is trading at a no noticeable deviation comparatively.

The Semiconductor Memory industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 255, which puts it in the bottom 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow MU in the coming trading sessions, be sure to utilize Zacks.com.


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