A month has gone by since the last earnings report for Micron (MU Quick QuoteMU - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Micron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Micron Crushes Q4 Earnings & Revenue Estimates, Up Y/Y

Micron ended fiscal 2024 on a strong note by reporting strong fourth-quarter results. Fourth-quarter top and bottom lines surpassed the Zacks Consensus Estimate and marked a significant year-over-year improvement. Looking at the key metrics, while quarterly revenues came at the high end of the management guidance range, gross margin and earnings per share (EPS) exceeded the guidance.

Micron reported non-GAAP EPS of $1.18, higher than the consensus mark of $1.10 and management’s forecast of $1.08 (+/- 8 cents). The bottom-line result registered strong improvement from the year-ago quarter’s loss of $1.07 per share and the previous quarter’s earnings of 62 cents per share.

Micron’s quarterly revenues soared 93% year over year and 14% sequentially to $7.75 billion. The top line also surpassed the Zacks Consensus Estimate of $7.64 billion and came at the high end of management’s guidance of $7.60 billion (+/- $200 million).

Micron’s better-than-expected fourth-quarter performance reflects the benefits of the robust demand for the artificial intelligence (AI) product portfolio, which resulted in higher pricing for DRAM (Dynamic Random Access Memory) and NAND. Strong sales executions and an improving supply-demand environment also aided growth in the fourth-quarter top and bottom lines.

Micron Q4 Top-Line Details

Technology-wise, DRAM revenues of $5.33 billion, accounting for 69% of the total revenues in the fiscal fourth quarter, increased 93% year over year and 14% sequentially. While bit shipments were flat sequentially, the average selling price (ASP) rose in the mid-teen percentage range on a quarter-over-quarter basis.

NAND revenues of $2.37 billion, representing 31% of the total top line, were up 96% year over year and 15% quarter over quarter. NAND bit shipment and ASP each increased in the high-single-digit percentage range sequentially.

Other revenues were $59 million in the reported quarter, up from $50 million in the year-ago quarter and $54 million in the previous quarter.

Business segment-wise, revenues of $3.02 billion from the Computing and Networking Business Unit soared 152% from the year-ago quarter and 17% sequentially. Revenues of $1.88 billion from the Mobile Business Unit jumped 55% on a year-over-year basis and 18% on a quarter-over-quarter basis.

The Embedded Business Unit’s revenues were $1.17 billion, up 36% from the year-ago period but down 9% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.68 billion, up 127% year over year and 24% sequentially.

Micron’s Q4 Operating Details

For the fourth quarter, Micron posted a non-GAAP gross profit of $2.83 billion, a robust improvement from the previous quarter’s $1.92 billion and the year-ago quarter’s non-GAAP gross loss of $366 million. The fourth-quarter non-GAAP gross margin of 36.5% also improved from the second quarter’s 28.1%. In the year-ago quarter, it had registered a negative gross margin of 9.1%.

Non-GAAP operating expenses were $1.08 billion compared with the previous quarter’s $976 million and the year-ago quarter’s $842 million.

Micron’s non-GAAP operating income of $1.75 billion was way higher than the previous quarter’s non-GAAP operating income of $941 million. It also shows improvement from the year-ago quarter’s non-GAAP operating loss of $1.21 billion.

The non-GAAP operating margin came in at 22.5%. Micron posted a non-GAAP operating margin of 13.8% for the third quarter of fiscal 2024, while it had a non-GAAP operating margin of negative 30.1%.

Micron’s Balance Sheet & Cash Flow

Micron exited the reported quarter with cash and investments of $9.16 billion compared with the $9.22 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $11.7 billion, flat when compared with the previous quarter.

Micron’s total debt, as of Aug. 29, 2024, was $13.4 billion compared with the $12.9 billion witnessed at the end of the third quarter.

The company generated an operating cash flow of $3.41 billion in the fourth quarter. It spent $3.1 billion on capital expenditure during the quarter, resulting in an adjusted free cash flow of $323 million. MU paid out $128 million in dividends and repurchased shares worth $300 million during the reported quarter.

Micron’s Q1 Outlook

Micron guided for the first quarter of fiscal 2025. The company anticipates revenues of $8.70 billion (+/-$200 million) for the fiscal first quarter. For the fiscal first quarter, MU projects a non-GAAP gross margin of 39.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.085 billion (+/-$15 million). Adjusted EPS is anticipated to be $1.74 (+/- 8 cents).

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Micron has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Micron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.