Jim Cramer: Micron Technology (MU) Stock May Keep Falling Amid Price Competition

NEW YORK (TheStreet) -- Shares of Micron Technology Inc (MU) were falling, down 2.67% to $19.14 in late morning trading Monday, after Jim Cramer explained why he thinks the company's stock may continue to slip on CNBC's Mad Money show Friday night.

TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says the company will continue to face price competition.

"There is no room for anyone in this sad, sad PC business right now. And the future, it grows dimmer not brighter," he added.

Cramer added that he was hoping Micron's 3D and NAND flash memory business could save the day, and keep the stock from burying itself in new lows.

Boise, Idaho-based Micron Technology is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory, as well as other memory technologies, packaging solutions and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products.

Separately, TheStreet Ratings team rates MICRON TECHNOLOGY INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"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 largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, MU has a quick ratio of 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MICRON TECHNOLOGY INC's earnings per share declined by 38.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MICRON TECHNOLOGY INC increased its bottom line by earning $2.55 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($2.96 versus $2.55).
  • MU, with its decline in revenue, slightly underperformed the industry average of 5.0%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICRON TECHNOLOGY INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: MU Ratings Report

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