Intrinsic value of Micron Technology, Inc. - MU

Previous Close

$48.97

  Intrinsic Value

$327.37

stock screener

  Rating & Target

str. buy

+569%

Previous close

$48.97

 
Intrinsic value

$327.37

 
Up/down potential

+569%

 
Rating

str. buy

We calculate the intrinsic value of MU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 54.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.30
  15.17
  14.15
  13.24
  12.41
  11.67
  11.01
  10.40
  9.86
  9.38
  8.94
  8.55
  8.19
  7.87
  7.59
  7.33
  7.09
  6.88
  6.70
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
Revenue, $m
  35,345
  40,707
  46,468
  52,619
  59,151
  66,055
  73,325
  80,954
  88,940
  97,281
  105,978
  115,034
  124,457
  134,255
  144,438
  155,021
  166,018
  177,447
  189,329
  201,686
  214,541
  227,921
  241,853
  256,368
  271,497
  287,274
  303,736
  320,918
  338,862
  357,609
Variable operating expenses, $m
  4,994
  5,727
  6,516
  7,358
  8,252
  9,197
  10,192
  11,236
  12,329
  13,471
  14,505
  15,745
  17,035
  18,376
  19,769
  21,218
  22,723
  24,287
  25,914
  27,605
  29,364
  31,196
  33,102
  35,089
  37,160
  39,319
  41,572
  43,924
  46,380
  48,946
Fixed operating expenses, $m
  12,077
  12,343
  12,614
  12,892
  13,175
  13,465
  13,761
  14,064
  14,374
  14,690
  15,013
  15,343
  15,681
  16,026
  16,378
  16,739
  17,107
  17,483
  17,868
  18,261
  18,663
  19,073
  19,493
  19,922
  20,360
  20,808
  21,266
  21,734
  22,212
  22,700
Total operating expenses, $m
  17,071
  18,070
  19,130
  20,250
  21,427
  22,662
  23,953
  25,300
  26,703
  28,161
  29,518
  31,088
  32,716
  34,402
  36,147
  37,957
  39,830
  41,770
  43,782
  45,866
  48,027
  50,269
  52,595
  55,011
  57,520
  60,127
  62,838
  65,658
  68,592
  71,646
Operating income, $m
  18,274
  22,636
  27,338
  32,369
  37,724
  43,393
  49,372
  55,654
  62,237
  69,120
  76,459
  83,946
  91,742
  99,854
  108,291
  117,064
  126,188
  135,677
  145,548
  155,820
  166,514
  177,652
  189,258
  201,357
  213,977
  227,147
  240,897
  255,260
  270,270
  285,962
EBITDA, $m
  23,626
  28,776
  34,324
  40,260
  46,575
  53,259
  60,306
  67,710
  75,467
  83,576
  92,038
  100,856
  110,037
  119,589
  129,523
  139,853
  150,593
  161,762
  173,379
  185,468
  198,052
  211,156
  224,810
  239,043
  253,887
  269,376
  285,547
  302,435
  320,083
  338,531
Interest expense (income), $m
  468
  251
  342
  439
  544
  656
  775
  900
  1,033
  1,172
  1,317
  1,469
  1,627
  1,792
  1,963
  2,141
  2,327
  2,519
  2,719
  2,927
  3,144
  3,368
  3,602
  3,846
  4,099
  4,363
  4,639
  4,926
  5,225
  5,538
  5,865
Earnings before tax, $m
  18,024
  22,295
  26,898
  31,825
  37,068
  42,619
  48,471
  54,621
  61,066
  67,803
  74,991
  82,320
  89,950
  97,891
  106,149
  114,738
  123,669
  132,957
  142,621
  152,677
  163,146
  174,050
  185,412
  197,258
  209,614
  222,508
  235,972
  250,035
  264,732
  280,098
Tax expense, $m
  4,866
  6,020
  7,263
  8,593
  10,008
  11,507
  13,087
  14,748
  16,488
  18,307
  20,248
  22,226
  24,287
  26,430
  28,660
  30,979
  33,391
  35,899
  38,508
  41,223
  44,049
  46,993
  50,061
  53,260
  56,596
  60,077
  63,712
  67,509
  71,478
  75,626
Net income, $m
  13,157
  16,275
  19,636
  23,233
  27,060
  31,112
  35,384
  39,874
  44,578
  49,496
  54,743
  60,093
  65,664
  71,460
  77,489
  83,759
  90,278
  97,059
  104,113
  111,454
  119,096
  127,056
  135,351
  143,998
  153,018
  162,431
  172,259
  182,526
  193,254
  204,471

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  48,219
  55,534
  63,394
  71,786
  80,697
  90,117
  100,034
  110,443
  121,337
  132,716
  144,581
  156,937
  169,792
  183,158
  197,051
  211,488
  226,491
  242,084
  258,294
  275,151
  292,689
  310,942
  329,950
  349,752
  370,392
  391,916
  414,373
  437,815
  462,295
  487,870
Adjusted assets (=assets-cash), $m
  48,219
  55,534
  63,394
  71,786
  80,697
  90,117
  100,034
  110,443
  121,337
  132,716
  144,581
  156,937
  169,792
  183,158
  197,051
  211,488
  226,491
  242,084
  258,294
  275,151
  292,689
  310,942
  329,950
  349,752
  370,392
  391,916
  414,373
  437,815
  462,295
  487,870
Revenue / Adjusted assets
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
Average production assets, $m
  25,978
  29,919
  34,154
  38,675
  43,476
  48,551
  53,894
  59,501
  65,371
  71,501
  77,894
  84,550
  91,476
  98,678
  106,162
  113,940
  122,023
  130,424
  139,157
  148,239
  157,688
  167,522
  177,762
  188,430
  199,550
  211,147
  223,246
  235,875
  249,064
  262,842
Working capital, $m
  5,054
  5,821
  6,645
  7,525
  8,459
  9,446
  10,485
  11,576
  12,718
  13,911
  15,155
  16,450
  17,797
  19,198
  20,655
  22,168
  23,741
  25,375
  27,074
  28,841
  30,679
  32,593
  34,585
  36,661
  38,824
  41,080
  43,434
  45,891
  48,457
  51,138
Total debt, $m
  6,326
  8,133
  10,074
  12,147
  14,348
  16,675
  19,124
  21,695
  24,386
  27,197
  30,127
  33,179
  36,355
  39,656
  43,088
  46,654
  50,359
  54,211
  58,215
  62,378
  66,710
  71,219
  75,914
  80,805
  85,903
  91,219
  96,766
  102,556
  108,603
  114,920
Total liabilities, $m
  11,910
  13,717
  15,658
  17,731
  19,932
  22,259
  24,708
  27,279
  29,970
  32,781
  35,711
  38,763
  41,939
  45,240
  48,672
  52,238
  55,943
  59,795
  63,799
  67,962
  72,294
  76,803
  81,498
  86,389
  91,487
  96,803
  102,350
  108,140
  114,187
  120,504
Total equity, $m
  36,309
  41,817
  47,736
  54,055
  60,765
  67,858
  75,326
  83,163
  91,367
  99,935
  108,869
  118,173
  127,853
  137,918
  148,380
  159,251
  170,548
  182,289
  194,495
  207,189
  220,395
  234,140
  248,452
  263,363
  278,905
  295,113
  312,023
  329,674
  348,108
  367,366
Total liabilities and equity, $m
  48,219
  55,534
  63,394
  71,786
  80,697
  90,117
  100,034
  110,442
  121,337
  132,716
  144,580
  156,936
  169,792
  183,158
  197,052
  211,489
  226,491
  242,084
  258,294
  275,151
  292,689
  310,943
  329,950
  349,752
  370,392
  391,916
  414,373
  437,814
  462,295
  487,870
Debt-to-equity ratio
  0.170
  0.190
  0.210
  0.220
  0.240
  0.250
  0.250
  0.260
  0.270
  0.270
  0.280
  0.280
  0.280
  0.290
  0.290
  0.290
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
Adjusted equity ratio
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753
  0.753

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  13,157
  16,275
  19,636
  23,233
  27,060
  31,112
  35,384
  39,874
  44,578
  49,496
  54,743
  60,093
  65,664
  71,460
  77,489
  83,759
  90,278
  97,059
  104,113
  111,454
  119,096
  127,056
  135,351
  143,998
  153,018
  162,431
  172,259
  182,526
  193,254
  204,471
Depreciation, amort., depletion, $m
  5,352
  6,140
  6,987
  7,891
  8,851
  9,866
  10,935
  12,056
  13,230
  14,456
  15,579
  16,910
  18,295
  19,736
  21,232
  22,788
  24,405
  26,085
  27,831
  29,648
  31,538
  33,504
  35,552
  37,686
  39,910
  42,229
  44,649
  47,175
  49,813
  52,568
Funds from operations, $m
  18,509
  22,415
  26,622
  31,123
  35,911
  40,978
  46,319
  51,930
  57,808
  63,953
  70,322
  77,003
  83,959
  91,196
  98,721
  106,547
  114,683
  123,144
  131,944
  141,102
  150,634
  160,561
  170,903
  181,684
  192,928
  204,660
  216,908
  229,701
  243,067
  257,040
Change in working capital, $m
  708
  767
  824
  880
  934
  987
  1,040
  1,091
  1,142
  1,193
  1,244
  1,295
  1,347
  1,401
  1,456
  1,513
  1,573
  1,634
  1,699
  1,767
  1,838
  1,913
  1,992
  2,076
  2,163
  2,256
  2,354
  2,457
  2,566
  2,681
Cash from operations, $m
  17,801
  21,648
  25,799
  30,244
  34,977
  39,990
  45,279
  50,839
  56,666
  62,760
  69,078
  75,708
  82,612
  89,795
  97,265
  105,033
  113,110
  121,509
  130,245
  139,335
  148,796
  158,647
  168,911
  179,609
  190,765
  202,404
  214,554
  227,243
  240,501
  254,359
Maintenance CAPEX, $m
  -4,469
  -5,196
  -5,984
  -6,831
  -7,735
  -8,695
  -9,710
  -10,779
  -11,900
  -13,074
  -14,300
  -15,579
  -16,910
  -18,295
  -19,736
  -21,232
  -22,788
  -24,405
  -26,085
  -27,831
  -29,648
  -31,538
  -33,504
  -35,552
  -37,686
  -39,910
  -42,229
  -44,649
  -47,175
  -49,813
New CAPEX, $m
  -3,633
  -3,941
  -4,234
  -4,521
  -4,801
  -5,075
  -5,343
  -5,608
  -5,869
  -6,130
  -6,392
  -6,657
  -6,926
  -7,201
  -7,485
  -7,778
  -8,083
  -8,401
  -8,733
  -9,082
  -9,448
  -9,834
  -10,240
  -10,668
  -11,120
  -11,596
  -12,099
  -12,629
  -13,189
  -13,779
Cash from investing activities, $m
  -8,102
  -9,137
  -10,218
  -11,352
  -12,536
  -13,770
  -15,053
  -16,387
  -17,769
  -19,204
  -20,692
  -22,236
  -23,836
  -25,496
  -27,221
  -29,010
  -30,871
  -32,806
  -34,818
  -36,913
  -39,096
  -41,372
  -43,744
  -46,220
  -48,806
  -51,506
  -54,328
  -57,278
  -60,364
  -63,592
Free cash flow, $m
  9,698
  12,512
  15,580
  18,892
  22,440
  26,220
  30,226
  34,452
  38,896
  43,555
  48,386
  53,473
  58,776
  64,298
  70,045
  76,023
  82,239
  88,704
  95,427
  102,421
  109,699
  117,276
  125,166
  133,388
  141,959
  150,898
  160,226
  169,965
  180,138
  190,767
Issuance/(repayment) of debt, $m
  1,687
  1,807
  1,941
  2,073
  2,201
  2,327
  2,450
  2,571
  2,691
  2,811
  2,931
  3,052
  3,175
  3,302
  3,431
  3,566
  3,706
  3,851
  4,004
  4,164
  4,332
  4,509
  4,695
  4,891
  5,098
  5,317
  5,547
  5,790
  6,047
  6,317
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,687
  1,807
  1,941
  2,073
  2,201
  2,327
  2,450
  2,571
  2,691
  2,811
  2,931
  3,052
  3,175
  3,302
  3,431
  3,566
  3,706
  3,851
  4,004
  4,164
  4,332
  4,509
  4,695
  4,891
  5,098
  5,317
  5,547
  5,790
  6,047
  6,317
Total cash flow (excl. dividends), $m
  11,385
  14,318
  17,522
  20,965
  24,642
  28,547
  32,676
  37,023
  41,587
  46,366
  51,316
  56,525
  61,951
  67,600
  73,477
  79,589
  85,945
  92,555
  99,431
  106,585
  114,031
  121,784
  129,861
  138,279
  147,057
  156,214
  165,773
  175,755
  186,184
  197,085
Retained Cash Flow (-), $m
  -5,063
  -5,508
  -5,918
  -6,319
  -6,710
  -7,093
  -7,468
  -7,837
  -8,203
  -8,568
  -8,934
  -9,304
  -9,680
  -10,065
  -10,461
  -10,871
  -11,297
  -11,741
  -12,206
  -12,694
  -13,206
  -13,745
  -14,312
  -14,911
  -15,542
  -16,208
  -16,910
  -17,651
  -18,433
  -19,258
Prev. year cash balance distribution, $m
  1,048
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  7,370
  8,810
  11,603
  14,646
  17,931
  21,454
  25,208
  29,186
  33,384
  37,798
  42,382
  47,221
  52,271
  57,535
  63,015
  68,718
  74,648
  80,814
  87,225
  93,891
  100,825
  108,039
  115,548
  123,368
  131,515
  140,007
  148,863
  158,104
  167,751
  177,826
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  7,066
  8,066
  10,098
  12,059
  13,899
  15,570
  17,030
  18,242
  19,177
  19,816
  20,127
  20,151
  19,874
  19,315
  18,500
  17,463
  16,242
  14,883
  13,430
  11,931
  10,429
  8,964
  7,573
  6,283
  5,116
  4,085
  3,195
  2,446
  1,831
  1,339
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Micron Technology, Inc. is engaged in semiconductor systems. The Company's portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets.

FINANCIAL RATIOS  of  Micron Technology, Inc. (MU)

Valuation Ratios
P/E Ratio 10.7
Price to Sales 2.7
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 6.7
Price to Free Cash Flow 15.9
Growth Rates
Sales Growth Rate 63.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.6%
Cap. Spend. - 3 Yr. Gr. Rate 8.8%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 53.1%
Total Debt to Equity 59.9%
Interest Coverage 12
Management Effectiveness
Return On Assets 17.6%
Ret/ On Assets - 3 Yr. Avg. 10.3%
Return On Total Capital 19.7%
Ret/ On T. Cap. - 3 Yr. Avg. 11.3%
Return On Equity 33.2%
Return On Equity - 3 Yr. Avg. 18.7%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 41.5%
Gross Margin - 3 Yr. Avg. 31.3%
EBITDA Margin 46.9%
EBITDA Margin - 3 Yr. Avg. 34.9%
Operating Margin 28.7%
Oper. Margin - 3 Yr. Avg. 16.1%
Pre-Tax Margin 25.6%
Pre-Tax Margin - 3 Yr. Avg. 13.1%
Net Profit Margin 25%
Net Profit Margin - 3 Yr. Avg. 13.6%
Effective Tax Rate 2.2%
Eff/ Tax Rate - 3 Yr. Avg. 0.5%
Payout Ratio 0%

MU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MU stock intrinsic value calculation we used $30391 million for the last fiscal year's total revenue generated by Micron Technology, Inc.. The default revenue input number comes from 0001 income statement of Micron Technology, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MU stock valuation model: a) initial revenue growth rate of 16.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for MU is calculated based on our internal credit rating of Micron Technology, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Micron Technology, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MU stock the variable cost ratio is equal to 14.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $11817 million in the base year in the intrinsic value calculation for MU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Micron Technology, Inc..

Corporate tax rate of 27% is the nominal tax rate for Micron Technology, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MU are equal to 73.5%.

Life of production assets of 4.9 years is the average useful life of capital assets used in Micron Technology, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MU is equal to 14.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $32294 million for Micron Technology, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1121.143 million for Micron Technology, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Micron Technology, Inc. at the current share price and the inputted number of shares is $54.9 billion.

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