Dray
Finance Student, Stock Investor, Technology & Business
Micron deserves 10-12x forward earnings rather than 6.2x, and its latest quarter only strengthened the bull case. Revenue reached $54.23B, up 379% year over year, and EPS $33.42, up 1,003%; next-quarter guidance is $62B revenue and $38.15 EPS versus estimates of $58B and $35.92. The market fears growth and demand could suddenly stop, but no one can time when or if that happens, whether in 1, 2, 3 or 5 years. It might not deserve 20x. x.com
Micron's exponential growth is still running, with revenue up 379% year over year in the quarter just reported. Guidance for fiscal Q1 2027 is $61.5B of revenue. Before the report, Micron traded at 6.5x 2027 earnings and a crushing beat was expected; the open question was how much more growth it would show. x.com
Micron looks quite cheap despite pulling back after an incredible earnings report, as one of only seven US companies over $10B with a forward P/E under 10 and 25%+ two-year revenue growth. Micron and Sandisk are cyclical, but each expects about 100% revenue CAGR over the next two years. They may not deserve 30-40x forward P/Es, but assigning a single-digit P/E is crazy. x.com x.com
Micron's revenue grew faster than its stock over the past year, leaving it cheaper on trailing earnings. Quarterly revenue rose from $11.3B to $54.2B, while the stock rose from about $198 to $878 and trailing P/E fell from roughly 24x to 11.6x. x.com
Micron looks expensive on price-to-book at about 8x versus a historical average of about 2x, and relying on forward P/E for such a cyclical business can be dangerous. x.com
Micron trades at an absurd 4-5x P/E on $200–$220 of annual EPS while Wall Street keeps moving the goalposts. On September 30, CEO Sanjay Mehrotra should report $35–$38 of EPS versus guided $30–$31 and call it a structural boom, yet the market will still ask for the next quarter. Free cash flow at levels none of the Big Five match could fund a buyback of up to 40% of its market cap. x.com
Micron's valuation looks ridiculous given the street's eight-year EPS estimates, even with a projected 2028 earnings peak and subsequent decline. At under $900, it trades at 5.09 times this year's expected EPS of $176.55. If consensus plays out, 2027-34 EPS would total $921.56, more than the share price; if analysts are wrong about when EPS peaks, Micron would look even cheaper. x.com
If Micron has only two years of decent forecasts, its limited visibility warrants a lower multiple, not a higher one. x.com
Micron's FY2028 earnings could substantially exceed the displayed $206.89 normalized EPS estimate, leaving the shares at about 3x FY2028 EPS. A beat of at least 30-50% depends on demand, pricing, margins and buybacks. x.com
Micron can't meet customer demand, giving it rare visibility at a valuation of about 5x next year's earnings. CEO Sanjay Mehrotra said customers are extending agreements into 2031, which gives certainty of demand and lets Micron plan capacity investments with confidence. The stock is now about $1,000, and with potential EPS beats over the next few quarters its forward P/E could be around 5, unthinkable about six months ago. x.com x.com
Micron's move is parabolic and should see a 50% or larger correction over the next few years. The stock has hit its 1.618 Fibonacci extension from the 2000 high at $1,200+, an 18x return in under 18 months and 120x in 10 years, with many speculators chasing it. Much of the rally is earnings driven, but the market is already pricing in future growth, and price can stay irrational for a while. Holders should trim 50-65% or sell in-the-money covered calls out to end-2027 or early 2028. x.com
Micron's sold-out high-bandwidth memory through 2027+ and contracts already being signed for 2029-2030+ extend its earnings runway. At 5x forward earnings, it is cheaper than a year ago; its private Anthropic stake is about to be instantly rerated at Anthropic's IPO, and a new share buyback is expected to be announced Dec. 9. Micron could certainly gain 30% in three months. x.com x.com
