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Micron's (MU) Rally Likely to Continue Further: Here's Why
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Micron Technology, Inc. (MU - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s rally reflects the company’s strong fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.
The company has performed brilliantly over the past year and has the potential to carry on the momentum further.
Why an Attractive Pick?
Share-Price Appreciation: Micron’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have rallied 154.6% compared with the S&P 500’s increase of 67.5%.
Solid Rank & Growth Score: Micron currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: All eight analysts covering the stock have raised their estimates for fiscal 2021 over the past 30 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current fiscal year has moved 18.5% north.
Positive Earnings Surprise History: Micron has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 10.4%.
Solid Growth Prospects: The Zacks Consensus Estimate of $4.61 for fiscal 2021 earnings suggests growth of 62.9% from the year-ago reported figure. Moreover, earnings are expected to register 97.1% growth in fiscal 2022 and reach $9.09 per share. Its long-term earnings per share growth rate is expected to be 9.2%.
Growth Drivers: Micron is benefiting from strong memory-chip demand from PC and mobile phone manufacturers, and tightness in supply.
During a Morgan Stanley conference held earlier this month, the company’s CFO David Zinsner stated that surging sales of mobile phones and computers are fueling the demand for its dynamic random access memory (DRAM) chips. He noted that elevated DRAM chip demand coupled with tightness in supply will make it difficult to meet orders for the rest of the year.
The COVID-19 pandemic-induced lockdown and social-distancing measures are spurring the demand for PCs and notebooks as more workers and students are now working and learning from their homes. This trend is likely to continue in 2021, thereby, aiding its top-line performance.
Moreover, according to a Gartner report, worldwide sales of smartphones will likely be up 11.4% year over year to 1.5 billion units in 2021. The independent market research firm stated that the availability of lower-end 5G-enabled smartphones and delayed device replacement are likely to drive smartphone sales this year.
Digitization across industries, increased adoption of cloud computing and services, and the integration of AI and machine learnings are likely to fuel the demand for Micron’s chips.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, blockchain, IoT, autonomous vehicles, AR/VR and wearables are other growth prospects.
Considering growth prospects of the chipmaker, it makes sense to invest for long-term gains.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology sector are Apple (AAPL - Free Report) , NVIDIA (NVDA - Free Report) and Facebook , each sporting a Zacks Rank #1 at present.
Long-term earnings per share growth rates for Apple, NVIDIA and Facebook are pegged at 11.5%, 15.1% and 19.2%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Shutterstock
Micron's (MU) Rally Likely to Continue Further: Here's Why
Micron Technology, Inc. (MU - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s rally reflects the company’s strong fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.
The company has performed brilliantly over the past year and has the potential to carry on the momentum further.
Why an Attractive Pick?
Share-Price Appreciation: Micron’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have rallied 154.6% compared with the S&P 500’s increase of 67.5%.
Solid Rank & Growth Score: Micron currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: All eight analysts covering the stock have raised their estimates for fiscal 2021 over the past 30 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current fiscal year has moved 18.5% north.
Positive Earnings Surprise History: Micron has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 10.4%.
Solid Growth Prospects: The Zacks Consensus Estimate of $4.61 for fiscal 2021 earnings suggests growth of 62.9% from the year-ago reported figure. Moreover, earnings are expected to register 97.1% growth in fiscal 2022 and reach $9.09 per share. Its long-term earnings per share growth rate is expected to be 9.2%.
Growth Drivers: Micron is benefiting from strong memory-chip demand from PC and mobile phone manufacturers, and tightness in supply.
During a Morgan Stanley conference held earlier this month, the company’s CFO David Zinsner stated that surging sales of mobile phones and computers are fueling the demand for its dynamic random access memory (DRAM) chips. He noted that elevated DRAM chip demand coupled with tightness in supply will make it difficult to meet orders for the rest of the year.
The COVID-19 pandemic-induced lockdown and social-distancing measures are spurring the demand for PCs and notebooks as more workers and students are now working and learning from their homes. This trend is likely to continue in 2021, thereby, aiding its top-line performance.
Moreover, according to a Gartner report, worldwide sales of smartphones will likely be up 11.4% year over year to 1.5 billion units in 2021. The independent market research firm stated that the availability of lower-end 5G-enabled smartphones and delayed device replacement are likely to drive smartphone sales this year.
Digitization across industries, increased adoption of cloud computing and services, and the integration of AI and machine learnings are likely to fuel the demand for Micron’s chips.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, blockchain, IoT, autonomous vehicles, AR/VR and wearables are other growth prospects.
Considering growth prospects of the chipmaker, it makes sense to invest for long-term gains.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology sector are Apple (AAPL - Free Report) , NVIDIA (NVDA - Free Report) and Facebook , each sporting a Zacks Rank #1 at present.
Long-term earnings per share growth rates for Apple, NVIDIA and Facebook are pegged at 11.5%, 15.1% and 19.2%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>