It has been about a month since the last earnings report for Micron (MU Quick QuoteMU - Free Report) . Shares have added about 17.8% in that time frame, outperforming the S&P 500.

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

Micron Beats Q1 Earnings Estimate, Revenues Matches

Micron reported first-quarter fiscal 2025 earnings of $1.79 per share, beating the Zacks Consensus Estimate by 2.3%. The company had incurred a loss of 95 cents per share in the year-ago period.

Micron’s revenues increased 84.3% year over year to $8.71 billion and matched the Zacks Consensus Estimate.

Micron Q1 Top-Line Details

Technology-wise, DRAM revenues of $6.4 billion, accounting for 73% of the total revenues in the fiscal first quarter, increased 87% year over year and 20% sequentially. The company experienced strong demand for data center DRAM, including HBM.

NAND revenues of $2.2 billion, representing 26% of the total revenues, were up 82% year over year but decreased 5% quarter over quarter.

Other revenues were $68 million in the reported quarter, down from $69 million in the year-ago quarter and up from $59 million in the previous quarter.

Business segment-wise, revenues of $4.4 billion from the Compute and Networking Business Unit soared 153% from the year-ago quarter and 46% sequentially. Revenues of $1.5 billion from the Mobile Business Unit jumped 16.3% on a year-over-year basis and 19% on a quarter-over-quarter basis.

The Embedded Business Unit’s revenues were $1.1 billion, up 5.8% from the year-ago period but down 10% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.7 billion, up 160% year over year and 3% sequentially.

Micron’s Q1 Operating Details

For the fiscal first quarter, Micron posted a non-GAAP gross profit of $3.35 billion, representing a robust improvement from the previous quarter’s $2.74 billion. The company reported a non-GAAP gross loss of $35 million in the year-ago quarter. The first-quarter non-GAAP gross margin of 39.5% also improved from the previous quarter’s 36.5%. In the year-ago quarter, it had registered a gross margin of 0.8%.

Non-GAAP operating expenses were $1.05 billion compared with the previous quarter’s $1.08 billion and the year-ago quarter’s $992 million.

Micron’s non-GAAP operating income of $2.39 billion was way higher than the previous quarter’s non-GAAP operating income of $1.75 million. It also shows improvement from the year-ago quarter’s non-GAAP operating loss of $955 million.

The non-GAAP operating margin came in at 27.5%. Micron posted a non-GAAP operating margin of 22.5% for the fourth quarter of fiscal 2024, while it had a non-GAAP operating margin of negative 20.2%.

Micron’s Balance Sheet & Cash Flow

Micron exited the reported quarter with cash and investments of $7.58 billion compared with the $9.16 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $11.2 billion, flat quarter over quarter.

Micron’s total debt, as of Nov. 28, 2024, was $13.7 billion compared with the $13.4 billion witnessed at the end of the fourth quarter of fiscal 2024.

The company generated an operating cash flow of $3.24 billion in the first quarter. It spent $3.2 billion on capital expenditure during the quarter, resulting in an adjusted free cash flow of $112 million. MU paid out $131 million in dividends but repurchased no shares in the first quarter of fiscal 2025.

Micron’s Q2 Outlook

Micron guided for the second quarter of fiscal 2025. The company anticipates revenues to be $7.90 billion (+/-$200 million) in the fiscal second quarter. For the fiscal second quarter, MU projects a non-GAAP gross margin of 38.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.10 billion (+/-$15 million). Adjusted EPS is anticipated to be $1.43 (+/- 10 cents).

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -28.81% due to these changes.

VGM Scores

Currently, Micron has a great Growth Score of A, 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Micron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Micron is part of the Zacks Computer - Integrated Systems industry. Over the past month, Hewlett Packard Enterprise (HPE Quick QuoteHPE - Free Report) , a stock from the same industry, has gained 12.1%. The company reported its results for the quarter ended October 2024 more than a month ago.

Hewlett Packard Enterprise reported revenues of $8.46 billion in the last reported quarter, representing a year-over-year change of +15.1%. EPS of $0.58 for the same period compares with $0.52 a year ago.

Hewlett Packard Enterprise is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of +4.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.

Hewlett Packard Enterprise has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.