In today’s rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Micron Technology (NASDAQ:MU) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company’s performance within the industry.
Micron Technology Background
Micron is one of the largest semiconductor companies in the world, specializing in memory and storage chips. Its primary revenue stream comes from dynamic random access memory, or DRAM, and it also has minority exposure to not-and or NAND, flash chips. Micron serves a global customer base, selling chips into data centers, mobile phones, consumer electronics, and industrial and automotive applications. The firm is vertically integrated.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Micron Technology Inc | 34.48 | 6.94 | 9.68 | 9.28% | $8.35 | $7.65 | 56.65% |
| NVIDIA Corp | 46.10 | 38.07 | 24.46 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 73.73 | 20.51 | 26.72 | 11.02% | $9.86 | $12.25 | 28.18% |
| Advanced Micro Devices Inc | 121.38 | 6.21 | 11.82 | 2.06% | $2.11 | $4.78 | 35.59% |
| Intel Corp | 782.67 | 2.11 | 3.87 | 3.98% | $7.85 | $5.22 | 2.78% |
| Texas Instruments Inc | 34.90 | 10.47 | 10.16 | 8.21% | $2.24 | $2.72 | 14.24% |
| Qualcomm Inc | 31.82 | 8.05 | 3.98 | -12.88% | $3.51 | $6.24 | 10.03% |
| Analog Devices Inc | 65.84 | 4.35 | 13.53 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 135.62 | 15.15 | 25.56 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 28.33 | 4.85 | 8.97 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 29.31 | 5.94 | 5.02 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 26.51 | 13.87 | 18.69 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 39.56 | 4.22 | 2.15 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 18.71 | 2.90 | 5.19 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 130.15 | 21.20 | 36.22 | 7.99% | $0.09 | $0.18 | 272.08% |
| ON Semiconductor Corp | 82.64 | 3.07 | 4.08 | 3.22% | $0.44 | $0.59 | -11.98% |
| STMicroelectronics NV | 48.33 | 1.39 | 2.21 | 1.33% | $0.31 | $1.06 | -1.97% |
| United Microelectronics Corp | 17.39 | 2.05 | 3.08 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 75.05 | 5.13 | 9.72 | 1.9% | $0.13 | $0.09 | 6.79% |
| Rambus Inc | 51.42 | 9.02 | 17.31 | 3.84% | $0.08 | $0.14 | 22.68% |
| Lattice Semiconductor Corp | 416.10 | 16.11 | 23.23 | 0.4% | $0.01 | $0.09 | 4.92% |
| Average | 112.78 | 9.73 | 12.8 | 5.21% | $6.7 | $6.43 | 32.11% |
Through a meticulous analysis of Micron Technology, we can observe the following trends:
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At 34.48, the stock’s Price to Earnings ratio is 0.31x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 6.94, significantly falling below the industry average by 0.71x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio is 9.68, which is 0.76x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 9.28% is 4.07% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.35 Billion is 1.25x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The company has higher gross profit of $7.65 Billion, which indicates 1.19x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company’s revenue growth of 56.65% exceeds the industry average of 32.11%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company’s financial health and risk profile, aiding in informed decision-making.
When assessing Micron Technology against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Micron Technology exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.21.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
Key Takeaways
For Micron Technology, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance and growth prospects relative to competitors in the Semiconductors & Semiconductor Equipment industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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