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Bull of the Day: Micron (MU)

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Micron Technology, Inc. (MU - Free Report) continues to crush it as it recently raised fiscal second quarter guidance even after giving bullish guidance last year. This Zacks Rank #1 (Strong Buy) is also dirt cheap, with one of the lowest P/Es in the technology sector, or any sector for that matter.

Micron makes memory and storage solutions including DRAM, NAND, NOR Flash and 3d XPoint memory. Its technology is used in artificial intelligence, machine learnings and autonomous vehicles.

Raised Fiscal Second Quarter Guidance

After easily beating the Zacks Consensus Estimate for its first quarter in December 2017, and providing strong second quarter guidance, Micron surprised the Street by raising that already bullish guidance less than two months later.

On Feb 5, Micron raised its fiscal second quarter revenue guidance to a range between $7.2 and $7.35 billion, up from $6.8 to $7.2 billion.

Earnings per share is now expected between $2.70 and $2.75 per share versus the prior guidance of $2.51 to $2.65.

It didn't provide any color about why it's so bullish, but clearly the company is still seeing strong demand this quarter.

Full Year Estimates Leap Again

The analysts are even more bullish than just 2 months ago after the last earnings report.

6 estimates are already higher for fiscal 2018, pushing the Zacks Consensus Estimate up to $10.13 from $9.83 in the last week. But that's a big increase from even just 60 days ago when the Zacks Consensus was a mere $7.66.

That's a jump of 104% over fiscal 2017 when the company made a mere $4.96.

Analysts are also getting more bullish on fiscal 2019.

Investors and analysts had believed that the supply-demand cycle would most likely moderate in the second half of calendar 2018. But will it?

2 months ago the Zacks Consensus Estimate for fiscal 2019 was just $5.95. But since the revised Q2 guidance, it has jumped to $8.67.

That's still a decline of 14.4% compared with this year, however, so the analysts continue to be cautious.

Want to Know More?

On Feb 7, Micron announced that it would present at several upcoming investor conferences.

Investors might want to tune in on Feb 15 at the Goldman Sachs Technology and Internet Conference in San Francisco or at the Feb 27 Morgan Stanley Technology, Media and Telecom Conference, also in San Francisco.

The company is set to report its second quarter results on Mar 22, after the bell, wherein it will likely provide some insight into how demand looks for the second half of the calendar year.

Micron is Dirt Cheap

Despite the bullishness by the company and the analysts, the shares have sold off with the rest of the market in the recent stock market correction.

They're down over 12% year-to-date and haven't re-tested the old highs in 2018.



Investors don't believe that this cycle will continue for much longer so they're waiting on the sidelines.

The result is a stock that is among the cheapest in the entire technology sector. Micron now trades with a forward P/E of just 4.

Given its low P/E and its big growth rate, it's not surprising that it has a low PEG ratio which is just 0.4. A PEG ratio under 1.0 usually indicates the company is a value stock. Investors are getting a bargain on the earnings.

For investors looking for value and a good growth story in the technology sector, a rare combination in recent years, Micron is one you want to keep on your short list.

The Hottest Tech Mega-Trend of All                 

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>




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