Micron Technology Inc (MU)

Conclusion

Micron Technology makes semiconductor memory and storage products, including DRAM, high-bandwidth memory, NAND and NOR chips, sold under its own brand and through distributors and direct sales. On 2026-11-11 the share traded at 811.30 USD, giving a market capitalisation of 917.9 billion USD.

The verdict is fair. The fair value band runs from 587.95 to 881.93 USD with a midpoint of 734.94 USD, a margin of safety of -9.4% at today's price. The discounted cash flow gives 821.89 USD per share, and the fair value from historical multiples is 647.99 USD. Against its own ten-year medians, the P/E of 10.8 and the P/FCF of 15.6 are below their medians of 13.7 and 19.9, while the EV/EBITDA of 8.1 is above its median of 6.4 and the P/B of 6.6 is far above its median of 1.8. The reverse DCF implies growth of 15.9% a year, against a five-year revenue growth rate of 36.9% actually delivered.

The strongest numbers are the return on invested capital of 84.5% against a WACC of 16.9%, the net cash position with net debt to EBITDA at -0.35, and the Piotroski score of 8 out of 9. The weakest are the Beneish reading of -0.24, which the model labels likely manipulation, the five-year free cash flow conversion of 59.5%, and the price-to-book of 6.6 against a median of 1.8. If cash generation fails to keep pace with reported earnings, or growth fades from its recent pace, the case would weaken.

Financial health

Financial strength is green, held up by the balance sheet. The current ratio is 3.31 and the quick ratio 2.90, the company holds net cash with net debt to EBITDA at -0.35, debt to equity is 0.04 and interest coverage is 937.2x. The Altman Z-score is 13.26, in the safe zone; the Altman model was designed for manufacturers, and Micron is one, so the reading applies. Insolvency risk: low, about 0.0% by the estimate of the Ohlson model over one to two years, as of 2026-08-31.

Earnings quality

Earnings quality is red, mainly because cash generation lags reported profit and the Beneish reading is a warning. Free cash flow conversion is 69.4% on a trailing basis but 59.5% over five years. The accrual ratio is -0.03, meaning low accruals, and stock-based compensation is 1.0% of revenue, leaving free cash flow after stock-based compensation at 57.63 billion USD. The share count has a five-year compound change of 0.04%, so it is essentially flat. The Piotroski score is 8 out of 9. The Beneish M-score is -0.24, labelled likely manipulation, which deserves scrutiny. The company beat estimates in all 8 of the last quarters, with an average surprise of 15.8%, and current-year estimates rose 13.3% over 90 days, next-year estimates 24.5%.

Profitability

Profitability is green. Gross margin is 80.7% against a median of 40.7%, operating margin 74.6% against 27.6%, and net margin 63.8% against 23.9%. Operating margin stability is 1.11. Return on invested capital is 84.5% against a WACC of 16.9%, a given ROIC minus WACC value of 67.6%, and the five-year median ROIC is 14.6%. The DuPont split shows a net margin of 63.8%, asset turnover of 0.68 and an equity multiplier of 1.42, giving a return on equity of 61.4%. Leverage contributes little, since the equity multiplier is 1.42 and the company holds net cash, so the return comes mainly from margins and asset turnover.

Growth

Growth is green. Revenue compound growth is 104.7% over three years, 36.9% over five and 26.8% over ten. Earnings per share compound growth over five years is 70.7%, and free cash flow per share 89.0%. Revenue grew in 7 of the 10 comparable years. The next-year earnings growth estimate is 17.7%. The three-year figure is far above the longer-run ones, so recent growth looks like an exceptional phase rather than a steady trend.

Valuation

Valuation is yellow, a neutral reading that matches the fair verdict. Against their own ten-year medians, the P/E of 10.8 sits at a premium of -20.9% to its median of 13.7, the P/FCF of 15.6 at -22.0% to 19.9, the EV/EBITDA of 8.1 at 26.6% to 6.4, the P/S of 6.9 at 143.3% to 2.8, and the P/B of 6.6 at 273.3% to 1.8. The discounted cash flow gives 821.89 USD per share at a discount rate of 17.0%, with 20% growth in the first stage and 2.5% in the terminal stage. The fair value band runs from 587.95 to 881.93 USD with a midpoint of 734.94 USD and a margin of safety of -9.4%. The reverse DCF implies 15.9% growth against 36.9% revenue growth over five years. The dividend yield is 0.07% and the payout on free cash flow 1.0%. The fair value is an order-of-magnitude estimate built on fixed assumptions, not a price target.

Risks

The weakest number is the price-to-book of 6.6 against a median of 1.8; a move back toward historical multiples would weigh heavily, and the fair value from historical multiples is 647.99 USD. The Beneish reading of -0.24 and the five-year free cash flow conversion of 59.5% would matter if cash flow failed to keep up with reported earnings. The price implies 15.9% growth, well below the 36.9% delivered, but the three-year rate of 104.7% means a slowdown from the recent pace would be a significant change. The beta of 2.40 signals high sensitivity to market moves. This analysis has limits: it has no debt maturity schedule, so refinancing risk cannot be assessed, and no revenue by segment, so the mix of memory products cannot be examined.