In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Micron Technology MU and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Micron Technology Background
Micron is one of the largest semiconductor companies in the world, specializing in memory and storage chips. Its primary revenue stream comes from dynamic random access memory, or DRAM, and it also has minority exposure to not-and or NAND, flash chips. Micron serves a global customer base, selling chips into data centers, mobile phones, consumer electronics, and industrial and automotive applications. The firm is vertically integrated.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Micron Technology Inc | 136.81 | 2.35 | 4.26 | 0.75% | $2.82 | $1.83 | 81.53% |
| NVIDIA Corp | 57.90 | 52.10 | 31.93 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.31 | 7.98 | 12.41 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 141.78 | 12.49 | 17.38 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 192.88 | 4.64 | 11.40 | 0.47% | $1.12 | $2.86 | 8.88% |
| Qualcomm Inc | 21.52 | 7.60 | 5.09 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 35.54 | 10.88 | 11.69 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 361.93 | 27.10 | 43.88 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 68.27 | 3.20 | 11.66 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 98.08 | 0.87 | 1.82 | -1.46% | $0.86 | $4.55 | -0.9% |
| Monolithic Power Systems Inc | 108.90 | 20.31 | 23.61 | 4.66% | $0.13 | $0.28 | 15.03% |
| Microchip Technology Inc | 30.32 | 6.37 | 6.31 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 15.87 | 3.58 | 3.93 | 4.11% | $0.58 | $0.78 | -17.15% |
| First Solar Inc | 21.58 | 3.57 | 6.90 | 4.94% | $0.48 | $0.5 | 24.65% |
| STMicroelectronics NV | 7.39 | 1.42 | 1.72 | 3.51% | $1.31 | $1.15 | -25.29% |
| ASE Technology Holding Co Ltd | 20.40 | 2.33 | 1.21 | 2.62% | $26.08 | $23.07 | 2.91% |
| United Microelectronics Corp | 13.17 | 1.96 | 3.08 | 3.76% | $27.9 | $19.98 | 0.89% |
| GLOBALFOUNDRIES Inc | 26.90 | 1.93 | 3.17 | 1.38% | $0.56 | $0.4 | -11.54% |
| Skyworks Solutions Inc | 20.08 | 2.45 | 3.59 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 44.49 | 6.44 | 15.85 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 107.21 | 7.09 | 11.39 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.01 | 10.19 | 11.45 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 22.27 | 3.46 | 3.62 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 67.58 | 9.0 | 11.05 | 4.28% | $25.73 | $20.63 | 7.97% |
When closely examining Micron Technology, the following trends emerge:
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The Price to Earnings ratio of 136.81 for this company is 2.02x above the industry average, indicating a premium valuation associated with the stock.
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Considering a Price to Book ratio of 2.35, which is well below the industry average by 0.26x, the stock may be undervalued based on its book value compared to its peers.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.26, which is 0.39x the industry average.
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The company has a lower Return on Equity (ROE) of 0.75%, which is 3.53% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.82 Billion, which is 0.11x below the industry average, potentially indicating lower profitability or financial challenges.
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With lower gross profit of $1.83 Billion, which indicates 0.09x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of 81.53% is notably higher compared to the industry average of 7.97%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Micron Technology in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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In terms of the debt-to-equity ratio, Micron Technology has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.31.
Key Takeaways
For Micron Technology, the PE ratio is high compared to its peers, indicating potential overvaluation. The PB ratio is low, suggesting the stock may be undervalued based on its book value. The PS ratio is also low, indicating a favorable valuation based on sales. In terms of ROE, EBITDA, gross profit, and revenue growth, Micron Technology lags behind its industry peers, signaling weaker financial performance and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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