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Is Micron (MU) Stock Undervalued Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Micron (MU). MU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.78, which compares to its industry's average of 14.96. Over the past 52 weeks, MU's Forward P/E has been as high as 19.30 and as low as 6.99, with a median of 15.63.

We should also highlight that MU has a P/B ratio of 1.53. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.65. MU's P/B has been as high as 1.82 and as low as 0.99, with a median of 1.41, over the past year.

These are only a few of the key metrics included in Micron's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MU looks like an impressive value stock at the moment.


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