Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Micron Technology (NASDAQ:MU) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company’s performance in 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 | 37.99 | 7.65 | 10.66 | 9.28% | $8.35 | $7.65 | 56.65% |
| NVIDIA Corp | 46.45 | 38.36 | 24.65 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 67.10 | 18.67 | 24.31 | 11.02% | $9.86 | $12.25 | 28.18% |
| Advanced Micro Devices Inc | 135.96 | 6.95 | 13.24 | 2.06% | $2.11 | $4.78 | 35.59% |
| Texas Instruments Inc | 35.21 | 10.56 | 10.25 | 8.21% | $2.24 | $2.72 | 14.24% |
| Qualcomm Inc | 31.10 | 7.85 | 3.89 | -12.88% | $3.51 | $6.24 | 10.03% |
| Analog Devices Inc | 67.02 | 4.42 | 13.77 | 2.32% | $1.47 | $1.94 | 25.91% |
| Marvell Technology Inc | 28.25 | 4.84 | 8.94 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 28.74 | 5.82 | 4.92 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 27.29 | 14.28 | 19.25 | 5.12% | $0.21 | $0.41 | 18.88% |
| First Solar Inc | 18.58 | 2.88 | 5.15 | 5.19% | $0.61 | $0.61 | 79.67% |
| ON Semiconductor Corp | 84.90 | 3.15 | 4.19 | 3.22% | $0.44 | $0.59 | -11.98% |
| Credo Technology Group Holding Ltd | 114.79 | 18.70 | 31.95 | 7.99% | $0.09 | $0.18 | 272.08% |
| Tower Semiconductor Ltd | 74.35 | 5.08 | 9.63 | 1.9% | $0.13 | $0.09 | 6.79% |
| Rambus Inc | 54.91 | 9.63 | 18.49 | 3.84% | $0.08 | $0.14 | 22.68% |
| Lattice Semiconductor Corp | 421.65 | 16.33 | 23.54 | 0.4% | $0.01 | $0.09 | 4.92% |
| Average | 82.42 | 11.17 | 14.41 | 5.85% | $4.21 | $4.98 | 40.26% |
Through a thorough examination of Micron Technology, we can discern the following trends:
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With a Price to Earnings ratio of 37.99, which is 0.46x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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The current Price to Book ratio of 7.65, which is 0.68x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The Price to Sales ratio is 10.66, which is 0.74x the industry average. This suggests a possible undervaluation based on sales performance.
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The company has a higher Return on Equity (ROE) of 9.28%, which is 3.43% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.35 Billion, which is 1.98x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $7.65 Billion, which indicates 1.54x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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With a revenue growth of 56.65%, which surpasses the industry average of 40.26%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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.
By considering the Debt-to-Equity ratio, Micron Technology can be compared to its top 4 peers, leading to the following observations:
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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. The high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance relative to competitors in the Semiconductors & Semiconductor Equipment sector. These metrics highlight Micron Technology’s profitability and growth potential in the industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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