Making the Cut: Micron (Micron Stock)

Micron stock

Micron Technology Inc (Micron Stock) latest outlook brings expectations back to normal, although the timeframe of the industry recovery is still unknown.

The most recent financial results released by Micron Technology Inc. (NASDAQ:MU) were a peculiar piece of positive news: they provided Wall Street with the reduction it requested—and then some.

Micron Stock and Company’s Sales

Yesterday, the price of the company’s stock was $50.01 a share.

Gill is a five-star analyst on TipRanks, with an average return of 9.5% and a success rate of 53.27%, according to the website. Gill specializes in the Technology sector, paying particular attention to companies like Nvidia and Micron as well as Pixelworks. According to the most recent corporate insider activity of 51 different insiders, the mood of corporate insiders about the stock is bearish. This indicates that there has been an increase in the number of insiders selling their shares of MU during the course of the most recent quarter in comparison to earlier this year.

On Thursday afternoon, the company that manufactures memory chips announced a significant decrease in its sales and operating profits for the fiscal fourth quarter. The company’s revenue for the quarter that ended on September 1 fell by 20% year over year to a total of $6.6 billion, marking the first revenue decline for Micron (Micron stock) in more than two years. This was in line with a warning that the company had issued at the beginning of August, which cited the rapidly deteriorating global economy as the cause of decreased sales of personal computers and smartphones, as well as a general trend among chip buyers to reduce their orders to clear out growing inventories.

The question of how much worse things would become before things started to turn around was the most significant uncertainty investors faced going into the report. Before the report was released on Thursday, several experts expressed their concerns that the forecasts provided by competitors for the current quarter that would finish in November were excessively optimistic. Brian Chin, an analyst at Stifel, pointed out that “the slope of the current Fed tightening cycle” is more comparable to times such as the early 2000s, with a significant drop in chip sales. On Monday, his research on Micron issued a warning that said, “In summary, don’t underestimate the severity of near-term headwinds to demand.”

It would appear that Micron (NASDAQ:MU) agrees. On Thursday, the business forecast that its sales for the current quarter would fall by 45% year over year to around $4.3 billion. This figure was 15% lower than the lowest goal that analysts surveyed by FactSet had set for the period. According to Micron’s spending prediction, the company may incur an operational loss for the quarter, which would be the first time it has been in the red in the last six years. During a conference call held by the business, Chief Executive Officer Sanjay Mehrotra remarked, “we expect industry profitability to remain challenged in 2023.”

The unfavorable news was not taken too seriously, though. By the time Micron (NASDAQ:MU) had finished its after-hours call, the price of its stock had fallen by a little more than one percent. That would actually be a more moderate reaction than the decrease in the stock that has been observed over the last two reports, which indicated slower growth and the early symptoms of what is becoming a larger downturn throughout the semiconductor market. However, as of right now, Micron’s shares are down 46% for the year and are trading at a price somewhat near their book value. Valuation will probably limit the stock’s decline, but it is also likely that uncertainty about the timing of the recovery will restrict any potential upside. Mr. Mehrotra anticipates that there will be an uptick in customer demand in the second half of the company’s fiscal year in 2023.


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About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.