"We rate Micron Technology Inc (MU) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
The semiconductor manufacturer is up 1.9% to $21.68 on Tuesday and is the fourth most-active stock on U.S. markets with 25 million shares changing hands after midday.
Sentiment for the company was high after getting it received a positive wrap in a Bernstein Research report. The investment firm gave the Boise-based business an "outperform" rating and price target of $24 on the belief demand for dynamic random-access memory (DRAM) and flash memory, products in Micron's portfolio, would continue to recover.
Since January, shares have spiked 241.8%, leading the Merrill Lynch Semiconductors (SMH) ETF which has gained 36.3%.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 44.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 729.16% and other important driving factors, this stock has surged by 272.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Micron Technology Inc reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Micron Technology Inc turned its bottom line around by earning $1 a share vs. -$1.04 a share in the prior year. This year, the market expects an improvement in earnings ($2.13 vs. $1).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 802.9% when compared to the same quarter one year prior, rising from -$243 million to $1,708 million.
- You can view the full analysis from the report here: MU Ratings Report