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Micron Technology Q4 Preview: Can the Earnings Streak Continue?

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The Zacks Computer & Technology sector has tumbled in 2022 amid the Federal Reserve’s pivot to a hawkish nature, down more than 30% and widely lagging behind the S&P 500.

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A widely-recognized company in the sector, Micron Technology (MU - Free Report) , is on deck to unveil Q4 earnings on September 29th after the market close.

Through global brands, namely Micron, Crucial, and Ballistix, Micron manufactures and markets high-performance memory and storage technologies, including Dynamic Random Access Memory (DRAM), NAND flash memory, NOR Flash, 3D XPoint memory, and other technologies.

Currently, the company carries a Zacks Rank #5 (Strong Sell) paired with an overall VGM Score of a B.

How does everything stack up heading into the print? Let’s take a closer look.

Share Performance & Valuation

Year-to-date, it’s been a harsh road for Micron shares, down nearly 50% and coming nowhere near the S&P 500’s performance.

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Image Source: Zacks Investment Research

Over the last month, the adverse price action has continued, with MU shares down roughly 14% and lagging the general market in this timeframe also.

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Image Source: Zacks Investment Research

The adverse price action of MU shares indicates that sellers have had control all year, which we’ve seen with many stocks in 2022.

Still, MU carries a Style Score of a B, indicating that shares could be undervalued. The company’s 12.5X forward earnings multiple reflects a steep 40% discount relative to its Zacks Computer and Technology Sector.

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Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have been overwhelmingly bearish in their earnings outlook over the last several months, with six negative earnings estimate revisions hitting the tape. The Zacks Consensus EPS Estimate of $1.42 pencils in a 41% drop-off in quarterly earnings Y/Y.

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Image Source: Zacks Investment Research

MU’s top line is also undergoing turbulence – the Zacks Consensus Sales Estimate of $6.9 billion reflects a 16% drop from year-ago quarterly sales of $8.3 billion.

Quarterly Performance & Market Reactions

Micron has an impressive earnings track record, exceeding the Zacks Consensus EPS Estimate in ten consecutive quarters. Just in its latest print, the company registered a 6% bottom-line beat.

Revenue results have also been inspiring; MU has penciled in nine top-line beats over its last ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

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Image Source: Zacks Investment Research

Additionally, it’s worth noting that MU shares have fallen following back-to-back quarterly prints.

Putting Everything Together

MU shares have struggled across several timeframes, with sellers spoiling the fun all year.

Shares trade at respectable levels, with MU’s forward earnings multiple well below its Zacks Sector average.

Analysts have been bearish in their earnings outlook, and estimates reflect a sizable downtick in revenue and earnings.

Still, the company has consistently exceeded quarterly estimates, but the market has had unfavorable reactions following its last two releases.

Heading into the print, Micron Technology (MU - Free Report) carries a Zacks Rank #5 (Strong Sell) with an Earnings ESP Score of 2.9%.

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