Micron: Despite losses, chip stock continues to rise.

Last Updated: 2. Januar 2024By

I hope you had a good New Year’s Eve. In any case, I wish you a happy new year. Probably it was the same for you as it was for almost all of my friends and acquaintances: We were glad that the year 2023 finally ended. But not everything went badly. This also applies to Micron Technology.

Micron Technology is a global manufacturer and distributor of semiconductor components. The company focuses on memory technologies and also offers packaging solutions and semiconductor systems for various applications such as computers, consumer electronics, network technology, automotive industry, and industrial products.

Micron Technology exceeds expectations For the first quarter, the company reported a revenue of $4.73 billion compared to $4.09 billion in the previous year. The net loss was $1.23 billion, compared to $195 million in the previous year. The loss per share was $1.12, compared to $0.18 a year ago. As such, the US company has deteriorated fundamentally.

Strong revenue predicted for the second quarter The company predicted a revenue of $5.3 billion for the second quarter, with a possible deviation of plus or minus $200 million, compared to expectations of $5.03 billion.

Further price stabilization expected until 2024 The company expects the price development to continue to stabilize this year, which is expected to lead to an increase in margins and improved financial performance. However, the stock has already anticipated a lot of positive news, as you can see in this chart.

Chip stock has potential to reach $140 Conclusion: If you look at analyst expectations, they are just as good as the chart. 29 out of 38 analysts recommend buying, 7 analysts rate it as hold, and only 2 analysts would reduce or sell their shares. The average analyst target price is $95 (previous month $85). However, there are also analysts who believe $140 is possible (upgraded from $112). But this does not change the fact that Micron will still incur losses in 2024. The jump into profitability will happen in 2025, but it will be strong. Based on this earnings estimate, the P/E ratio will only be 15.