The memory maker now sees more earnings a quarter than it did when its shares peaked. Has the sell-off been overdone?
The memory maker now sees more earnings a quarter than it did when its shares peaked.
Has the sell-off been overdone?
Micron Technology (MU +1.87%) hit its closing high of $1,213.56 on June 25, the day after the memory maker posted its fiscal third-quarter results. On Oct. 14, the stock ended at $914.13 -- around 25% below that record and its lowest close since Aug. 24.
Still, the company has beaten the outlook management gave on June 24, and Micron now sees tighter memory supply through fiscal 2028.
I think the drop has more to do with where memory prices are heading than with anything going wrong at Micron. And at this price, the stock already reflects a lot of that risk.
Micron has beaten its own June outlook
When Micron reported in June, management called for fiscal fourth-quarter revenue of $50 billion, plus or minus $1 billion, and around $31 in non-GAAP (adjusted) earnings per share. The company posted $54.2 billion in revenue and $33.42 in adjusted earnings per share in the quarter, which ended Sept. 3.
Both numbers topped the high end of management's guidance.
Showing how fast the business has grown, Micron's revenue climbed from $23.9 billion in fiscal Q2 to $41.5 billion in fiscal Q3 before reaching $54.2 billion in fiscal Q4. Also, management now forecasts around $61.5 billion in revenue for the first quarter of fiscal 2027, with adjusted per-share earnings of about $38. That per-share forecast is around 23% above the one investors had when the stock set its record.
Management's view of memory supply has become tighter, too. In June, it said it expected industry supply "to improve gradually in 2028."
Averytin News Financial update.