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Micron (MU) Outpaces Stock Market Gains: What You Should Know

Micron (MU) closed at $84.09 in the latest trading session, marking a +1.31% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.52%. Meanwhile, the Dow gained 0.62%, and the Nasdaq, a tech-heavy index, added 0.12%.

Prior to today's trading, shares of the chipmaker had lost 10.29% over the past month. This has lagged the Computer and Technology sector's loss of 5.18% and the S&P 500's loss of 0.76% in that time.

MU will be looking to display strength as it nears its next earnings release, which is expected to be March 31, 2021. The company is expected to report EPS of $0.95, up 111.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.23 billion, up 29.84% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.52 per share and revenue of $26.05 billion. These totals would mark changes of +59.72% and +21.52%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MU. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 15.11% higher. MU is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, MU is currently trading at a Forward P/E ratio of 18.34. This represents a no noticeable deviation compared to its industry's average Forward P/E of 18.34.

We can also see that MU currently has a PEG ratio of 1.99. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Memory industry currently had an average PEG ratio of 1.99 as of yesterday's close.

The Semiconductor Memory industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 7, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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