Micron Technology really put up some great numbers this week. With a 40% growth in revenues (QtoQ) and net income up 120%, fundamentally it is really putting up fantastic numbers. GAAP earning went from $1.40 to $3.10. Wow! Now that's what I am talking about.
Their operating income margin (QtoQ) went from 35.3% to 50.7%. Furthermore, it wasn't bolstered by financial leverage since the debt/equity dropped a good bit. So, MU is firing on all cylinders and "slamming the boards". Sweet.
Comparing it to the market, the PE is a slight 6.9 which is historically at the low end of their valuation over a 10 year period.
Even though the market is long-in-the-tooth and the microprocessor industry's cycle is rising, I think it still has legs to run. Without getting too wrapped up in the AI craze, I think AI is still striding and will continue to do so for an extended time frame. MU provides critical components to support the AI boom. So many companies need to upgrade antiquated technology or they will be left behind.
Given that it is relatively cheap, I think it is a buy.
Mr. Market is feeling in the dumps today on the microprocessor industry and dumping on MU. It might be a good entry point. Take a look at the fundamentals and compare it to the market. I think you'll like what you see.
Although I am cautious about this market in most ways, there are still "values" out there in unique situations. This is one of them. At the low 6.9 PE, it shows a nice margin of safety.
Carpe Diem!
