Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Micron Technology MU in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 150.07 | 2.58 | 4.68 | 1.99% | $3.63 | $2.74 | 93.27% |
| NVIDIA Corp | 65.43 | 58.86 | 36.08 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 35.69 | 8.37 | 13.70 | 8.36% | $360.77 | $439.35 | 38.95% |
| Broadcom Inc | 140.15 | 12.34 | 17.18 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 182.04 | 4.38 | 10.76 | 0.47% | $1.12 | $2.86 | 8.88% |
| Qualcomm Inc | 21.30 | 7.52 | 5.04 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 34.96 | 10.66 | 11.50 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 351.99 | 26.35 | 42.68 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 68.33 | 3.20 | 11.67 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 91.58 | 0.82 | 1.70 | -1.46% | $0.86 | $4.55 | -0.9% |
| Monolithic Power Systems Inc | 105.20 | 19.62 | 22.81 | 4.66% | $0.13 | $0.28 | 15.03% |
| Microchip Technology Inc | 29.99 | 6.30 | 6.24 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 15.48 | 3.49 | 3.84 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 7.34 | 1.41 | 1.71 | 3.51% | $1.31 | $1.15 | -25.29% |
| ASE Technology Holding Co Ltd | 20.36 | 2.33 | 1.21 | 2.62% | $26.08 | $23.07 | 2.91% |
| GLOBALFOUNDRIES Inc | 26.28 | 1.88 | 3.10 | 1.38% | $0.56 | $0.4 | -11.54% |
| First Solar Inc | 17.18 | 2.84 | 5.49 | 4.94% | $0.48 | $0.5 | 24.65% |
| United Microelectronics Corp | 11.71 | 1.74 | 2.74 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 19.62 | 2.39 | 3.50 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 43.10 | 6.24 | 15.35 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 116.74 | 7.72 | 12.40 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 39.02 | 10.46 | 11.76 | 3.28% | $0.04 | $0.08 | -34.72% |
| Average | 68.74 | 9.47 | 11.45 | 4.45% | $21.55 | $25.47 | 7.44% |
By conducting a comprehensive analysis of Micron Technology, the following trends become evident:
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The current Price to Earnings ratio of 150.07 is 2.18x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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The current Price to Book ratio of 2.58, which is 0.27x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.68, which is 0.41x the industry average.
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With a Return on Equity (ROE) of 1.99% that is 2.46% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.63 Billion, which is 0.17x below the industry average, the company may face lower profitability or financial challenges.
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The company has lower gross profit of $2.74 Billion, which indicates 0.11x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 93.27%, outperforming the industry average of 7.44%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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.
By analyzing Micron Technology in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Micron Technology has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.31.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator 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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