Traders concerned about Micron Know-how NASDAQ: MU ought to cheer the truth that its inventory tanked following the FQ1 2025 earnings report. The transfer is a knee-jerk response to blended outcomes and steering that time to near-term weak spot and long-term energy, pushed by its shift to AI. 
Micron Know-how TodayMUMicron Know-how$90.12 +3.03 (+3.48%) (As of 05:45 PM ET)52-Week Vary$79.15▼$157.54Dividend Yield0.51percentP/E Ratio132.53Price Goal$132.26
The legacy enterprise stays an issue for Micron. The worldwide semiconductor stock reset is taking longer than anticipated on account of finish markets, together with PCs. Nonetheless, it’s offset by energy in next-gen applied sciences: Micron’s superior information middle and AI merchandise, together with its industry-leading HBM3E reminiscence chips. HBM reminiscence is essential to AI due to the capability and velocity at which it operates. Micron’s HBM3E is the {industry}’s most superior, delivering considerably higher efficiency with decrease power use, good for information facilities and AI consumption. Get Micron Know-how alerts:Signal Up
Micron Delivers Combined Outcomes and Weak Steerage; Forecasts 35% Development
Micron delivered blended outcomes and gave weak steering for Q2, however let’s be honest. The corporate produced 84% year-over-year (YoY) income progress and a wider margin for report outcomes, outperformed on the underside line, and guided for one more 35% YoY progress in Q2. The expansion is slowing sequentially and on a YoY foundation, however 35%, along with final 12 months’s 50% acquire, is strong, and the bar was set excessive. Analysts have been lifting their expectations all 12 months as AI demand and information middle enterprise drove energy in peripheral markets akin to reminiscence. Given the developments, Micron’s steering is probably going cautious. 
Micron Know-how MarketRank™ Inventory AnalysisOverall MarketRank™99th Percentile Analyst RatingModerate Purchase Upside/Downside46.8% Upside Quick Curiosity LevelHealthy Dividend StrengthWeak Environmental Rating-2.35 Information Sentiment0.13 Insider TradingSelling Shares Proj. Earnings Growth51.38% See Full Evaluation
Segmentally, DRAM gross sales grew by 20% sequentially and 86% 12 months over 12 months on account of demand for HBM3 and supporting expertise. HBM gross sales greater than doubled, and SSD gross sales had been additionally robust. The corporate cites a market share acquire within the SSD phase and forecasts extra good points within the coming quarters. 
Margin information is powerful. The corporate produced a 27.5% adjusted working margin, 50 foundation factors higher than MarketBeat’s reported consensus, up 500 foundation factors sequentially, reversing a loss posted within the earlier 12 months. The adjusted $1.79 is up considerably from final 12 months’s $0.95 loss and practically 200 foundation factors above forecasts. The takeaway is that Micron’s enterprise is sustaining earnings and enhancing profitability, with strengths anticipated to proceed this 12 months, offering constructive free money movement. 
Micron Is Investing in Subsequent Gen Know-how and Development
Micron’s stability sheet exhibits some modifications, together with a YTD money discount. Nevertheless, the crimson flags are offset by elevated spending on HBM applied sciences and ramping manufacturing to fulfill demand.  The result’s that money is down, however the firm stays well-capitalized and is constructing worth for buyers. The stability sheet highlights embody elevated receivables, present, and whole belongings solely partially offset by elevated legal responsibility. Belongings rose by $2.05 billion or about 3%, whereas liabilities elevated by lower than $0.5 billion or about 1.5%, leaving fairness up by 3.7%. Leverage stays low, with a complete legal responsibility of about 0.5x fairness, leaving the corporate in a strong monetary place able to executing its plans whereas paying its dividend.
The Analysts Are Underwhelmed by Micron’s Robust Quarter
The analyst’s response to Micron’s outcomes is blended. The majority of exercise is unfavourable, together with quite a few worth goal reductions and a downgrade to Maintain from Financial institution of America. Nonetheless, the chatter is optimistic, citing each near-term headwinds and an expectation for energy to enhance within the again half of subsequent 12 months when legacy enterprise reverts to progress. And never all the revisions are unfavourable. Rosenblatt maintained its Purchase ranking and $250 worth goal, anticipating a 150% inventory worth enhance. The consensus sentiment for Micron is a Average Purchase, and most analysts see it buying and selling above $110.
The inventory worth pulled again by 12% in early pre-market buying and selling however could not have a lot deeper to maneuver. The inventory trades at a deep-value degree and above essential assist on the long-term transferring common. There’s a threat that Micron might fall under the $85 degree, however that’s not anticipated because of the low 11x earnings a number of, energy in outcomes, and long-term outlook for industry-leading outcomes pushed by HBM3 demand. The extra seemingly situation is that this market will regain traction shortly, confirming essential assist ranges because it rebounds from the post-release lows. 
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