Micron Technology (MU, Financial) has announced the release of qualification samples for its cutting-edge low-power double data rate 5X memory, based on the advanced 1gamma node. This innovative memory solution is set to enhance AI functionalities in high-end smartphones. The LPDDR5X delivers an impressive speed of 10.7 gigabits per second, achieving up to 20% energy efficiency. This translates into smartphones that provide faster, more fluid experiences and prolonged battery life, even when handling demanding tasks like AI-driven translations and image processing. Micron's latest development is poised to significantly elevate the performance and efficiency of flagship mobile devices.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 34 analysts, the average target price for Micron Technology Inc (MU, Financial) is $120.23 with a high estimate of $172.00 and a low estimate of $60.00. The average target implies an upside of 22.46% from the current price of $98.18. More detailed estimate data can be found on the Micron Technology Inc (MU) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, Micron Technology Inc's (MU, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Micron Technology Inc (MU, Financial) in one year is $148.94, suggesting a upside of 51.7% from the current price of $98.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Micron Technology Inc (MU) Summary page.
MU Key Business Developments
Release Date: March 20, 2025
- Total Revenue: $8.1 billion, down 8% sequentially, up 38% year-over-year.
- DRAM Revenue: $6.1 billion, up 47% year-over-year, 76% of total revenue.
- NAND Revenue: $1.9 billion, up 18% year-over-year, 23% of total revenue.
- Gross Margin: 37.9%, down 160 basis points sequentially.
- Operating Income: $2 billion, operating margin of 24.9%.
- Adjusted EBITDA: $4.1 billion, EBITDA margin of 50.7%.
- Non-GAAP EPS: $1.56, above guidance range.
- Operating Cash Flow: Over $3.9 billion.
- Capital Expenditures: $3.1 billion, net of government incentives.
- Free Cash Flow: $857 million.
- Ending Inventory: $9.0 billion or 158 days.
- Total Debt: $14.4 billion, with a weighted average maturity of 2032.
- Liquidity: $12.1 billion, including untapped credit facility.
- Fiscal Q3 Revenue Guidance: $8.80 billion, plus or minus $200 million.
- Fiscal Q3 Gross Margin Guidance: 36.5%, plus or minus 100 basis points.
- Fiscal Q3 EPS Guidance: $1.57 per share, plus or minus $0.10.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Micron Technology Inc (MU, Financial) achieved record revenues in data center DRAM, with HBM revenue growing more than 50% sequentially to over $1 billion.
- The company remains the only one globally to ship low-power DRAM into the data center in high volume, showcasing its pioneering innovation.
- Micron's 1-beta DRAM technology leads the industry, and the launch of the 1-gamma node has shown significant improvements in power, performance, and bit-density.
- The company is making disciplined investments to capitalize on AI-driven growth opportunities, including expanding HBM capacity and constructing new facilities.
- Micron's HBM3E delivers a 30% power reduction compared to competitors, and the company has begun volume production of HBM3E 12 high, focusing on ramping capacity and yield.
Negative Points
- Fiscal Q2 revenue was down 8% sequentially, and the gross margin decreased due to pricing in consumer-oriented segments, especially in NAND.
- NAND revenue decreased 17% sequentially, with prices decreasing in the high-teens percentage range.
- The company faces challenges with NAND underutilization, which continues to weigh on gross margins.
- Operating expenses are projected to increase by over 10% in fiscal 2025 to support high-value products, impacting profitability.
- Micron's inventory days increased to 158 days, up from the prior quarter, indicating potential inefficiencies in inventory management.
