In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Micron Technology MU against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim 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 | 145.29 | 2.50 | 4.53 | 1.99% | $3.63 | $2.74 | 93.27% |
| NVIDIA Corp | 62.19 | 55.95 | 34.30 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.33 | 8.23 | 12.80 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 150.20 | 13.23 | 18.41 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 203.60 | 4.90 | 12.04 | 0.47% | $1.12 | $2.86 | 8.88% |
| Qualcomm Inc | 21.77 | 7.69 | 5.15 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 35.52 | 10.87 | 11.68 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 367.05 | 27.48 | 44.50 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 70.25 | 3.29 | 12 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 97.75 | 0.87 | 1.81 | -1.46% | $0.86 | $4.55 | -0.9% |
| Monolithic Power Systems Inc | 111.43 | 20.78 | 24.16 | 4.66% | $0.13 | $0.28 | 15.03% |
| Microchip Technology Inc | 31.15 | 6.55 | 6.48 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 16.17 | 3.65 | 4.01 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 7.41 | 1.42 | 1.72 | 3.51% | $1.31 | $1.15 | -25.29% |
| First Solar Inc | 20.18 | 3.34 | 6.46 | 4.94% | $0.48 | $0.5 | 24.65% |
| GLOBALFOUNDRIES Inc | 27.33 | 1.96 | 3.22 | 1.38% | $0.56 | $0.4 | -11.54% |
| ASE Technology Holding Co Ltd | 19.80 | 2.26 | 1.17 | 2.62% | $26.08 | $23.07 | 2.91% |
| United Microelectronics Corp | 12.28 | 1.83 | 2.87 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 20.21 | 2.47 | 3.61 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 45.30 | 6.56 | 16.14 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 115.41 | 7.63 | 12.26 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.09 | 10.21 | 11.48 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 22.53 | 3.50 | 3.66 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 69.5 | 9.3 | 11.36 | 4.28% | $25.73 | $20.63 | 7.97% |
By analyzing Micron Technology, we can infer the following trends:
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The Price to Earnings ratio of 145.29 for this company is 2.09x above the industry average, indicating a premium valuation associated with the stock.
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Considering a Price to Book ratio of 2.5, which is well below the industry average by 0.27x, the stock may be undervalued based on its book value compared to its peers.
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The Price to Sales ratio is 4.53, which is 0.4x the industry average. This suggests a possible undervaluation based on sales performance.
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With a Return on Equity (ROE) of 1.99% that is 2.29% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.63 Billion, which is 0.14x below the industry average, potentially indicating lower profitability or financial challenges.
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The gross profit of $2.74 Billion is 0.13x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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With a revenue growth of 93.27%, which surpasses the industry average of 7.97%, the company is demonstrating robust sales expansion and gaining market share.
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.
In light of the Debt-to-Equity ratio, a comparison between Micron Technology and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, Micron Technology exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.31, which can be perceived as a positive aspect by investors.
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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