Why It Is Worth Buying Micron Technology (MU) Shares Now
Zacks Investment Research | Aug 21, 2017 10:28PM ET
The technology space continues to be investors’ favorite due to its dynamic nature. This field is expected to grow faster than ever before. Therefore, if you invest right, you can reap the benefits over time..
Below we have evaluated one technology company that has demonstrated remarkable share price performance so far. Micron Technology, Inc. (NASDAQ:MU) has generated significant returns for investors in the last year and has the potential to exceed expectations in the days ahead.
The stock has returned approximately 82.6% in the last year, significantly outperforming the S&P 500’s gain of just 10.9%.
Let’s look at the reasons behind Micron’s solid momentum.
What’s Driving the Stock?
The main reason behind the optimism surrounding the stock is improving prices for DRAM and NAND chips. Per various sources, DRAM and NAND prices have improved primarily due to a better product mix optimization and higher-than-expected demand for PCs, servers and mobiles.
The benefit from improved pricing was well reflected in the company’s last quarterly results. Its fiscal third-quarter 2017 revenues not only increased 92.1% on a year-over-year basis but also surpassed the Zacks Consensus Estimate. Most importantly, the company’s DRAM product category witnessed a 5% increase in bit shipment and 14% rise in average selling prices (ASP) during the quarter.
The company’s third-quarter non-GAAP earnings per share of $1.62 came ahead of the Zacks Consensus Estimate of $1.49. Also, it marked a significant improvement from the year-ago quarter’s loss of 3 cents.
An encouraging top- and bottom-line guidance for the fourth quarter, way above the respective Zacks Consensus Estimate, also helped in boosting investors’ confidence about the company’s future prospects.
Upward Estimate Revisions
In the last 60 days, the Zacks Consensus Estimate for the fourth quarter and fiscal 2017 witnessed upward movement. For the fiscal fourth quarter, the Zacks Consensus Estimate is currently pegged at $1.81 per share, up 30 cents from earnings of $1.51 projected 60 days ago. The Zacks Consensus Estimate for fiscal 2017 is currently pegged at $4.61 per share compared with $4.11 projected 60 days ago.
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Micron Technology, Inc. Price, Consensus and EPS Surprise
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