Intrinsic value of Micron Technology - MU

Previous Close

$45.06

  Intrinsic Value

$731.53

stock screener

  Rating & Target

str. buy

+999%

Previous close

$45.06

 
Intrinsic value

$731.53

 
Up/down potential

+999%

 
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 52.3

 

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, %
  40.10
  36.59
  33.43
  30.59
  28.03
  25.73
  23.65
  21.79
  20.11
  18.60
  17.24
  16.01
  14.91
  13.92
  13.03
  12.23
  11.50
  10.85
  10.27
  9.74
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
Revenue, $m
  28,471
  38,889
  51,890
  67,762
  86,754
  109,073
  134,873
  164,259
  197,291
  233,984
  274,319
  318,251
  365,712
  416,627
  470,912
  528,490
  589,288
  653,247
  720,325
  790,495
  863,753
  940,114
  1,019,615
  1,102,315
  1,188,293
  1,277,651
  1,370,508
  1,467,007
  1,567,305
  1,671,582
Variable operating expenses, $m
  7,936
  10,780
  14,330
  18,664
  23,850
  29,944
  36,989
  45,013
  54,032
  64,051
  74,904
  86,899
  99,859
  113,761
  128,584
  144,306
  160,907
  178,371
  196,687
  215,847
  235,850
  256,701
  278,409
  300,990
  324,467
  348,866
  374,221
  400,570
  427,957
  456,430
Fixed operating expenses, $m
  9,142
  9,343
  9,548
  9,759
  9,973
  10,193
  10,417
  10,646
  10,880
  11,120
  11,364
  11,614
  11,870
  12,131
  12,398
  12,671
  12,949
  13,234
  13,525
  13,823
  14,127
  14,438
  14,755
  15,080
  15,412
  15,751
  16,097
  16,451
  16,813
  17,183
Total operating expenses, $m
  17,078
  20,123
  23,878
  28,423
  33,823
  40,137
  47,406
  55,659
  64,912
  75,171
  86,268
  98,513
  111,729
  125,892
  140,982
  156,977
  173,856
  191,605
  210,212
  229,670
  249,977
  271,139
  293,164
  316,070
  339,879
  364,617
  390,318
  417,021
  444,770
  473,613
Operating income, $m
  11,394
  18,766
  28,011
  39,339
  52,931
  68,936
  87,467
  108,600
  132,378
  158,813
  188,051
  219,737
  253,984
  290,735
  329,930
  371,513
  415,432
  461,642
  510,113
  560,825
  613,776
  668,975
  726,451
  786,244
  848,414
  913,034
  980,190
  1,049,985
  1,122,534
  1,197,968
EBITDA, $m
  16,486
  25,663
  37,160
  51,237
  68,119
  87,989
  110,988
  137,211
  166,710
  199,500
  235,563
  274,858
  317,325
  362,894
  411,492
  463,048
  517,496
  574,784
  634,873
  697,739
  763,378
  831,803
  903,048
  977,165
  1,054,227
  1,134,323
  1,217,562
  1,304,070
  1,393,992
  1,487,486
Interest expense (income), $m
  468
  636
  990
  1,442
  2,005
  2,694
  3,518
  4,485
  5,604
  6,879
  8,311
  9,903
  11,652
  13,557
  15,616
  17,824
  20,178
  22,675
  25,312
  28,086
  30,995
  34,038
  37,216
  40,527
  43,975
  47,562
  51,291
  55,166
  59,193
  63,378
  67,728
Earnings before tax, $m
  10,758
  17,776
  26,569
  37,334
  50,237
  65,419
  82,982
  102,996
  125,499
  150,501
  178,149
  208,085
  240,426
  275,119
  312,107
  351,335
  392,756
  436,330
  482,026
  529,830
  579,737
  631,760
  685,923
  742,269
  800,853
  861,743
  925,023
  990,791
  1,059,156
  1,130,240
Tax expense, $m
  2,905
  4,799
  7,174
  10,080
  13,564
  17,663
  22,405
  27,809
  33,885
  40,635
  48,100
  56,183
  64,915
  74,282
  84,269
  94,861
  106,044
  117,809
  130,147
  143,054
  156,529
  170,575
  185,199
  200,413
  216,230
  232,671
  249,756
  267,514
  285,972
  305,165
Net income, $m
  7,853
  12,976
  19,396
  27,254
  36,673
  47,756
  60,577
  75,187
  91,614
  109,866
  130,048
  151,902
  175,511
  200,837
  227,838
  256,475
  286,712
  318,521
  351,879
  386,776
  423,208
  461,184
  500,724
  541,857
  584,622
  629,072
  675,267
  723,278
  773,184
  825,075

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
  47,611
  65,031
  86,772
  113,314
  145,074
  182,396
  225,540
  274,681
  329,918
  391,277
  458,728
  532,192
  611,559
  696,700
  787,479
  883,762
  985,431
  1,092,386
  1,204,556
  1,321,898
  1,444,403
  1,572,097
  1,705,042
  1,843,336
  1,987,112
  2,136,540
  2,291,820
  2,453,188
  2,620,911
  2,795,287
Adjusted assets (=assets-cash), $m
  47,611
  65,031
  86,772
  113,314
  145,074
  182,396
  225,540
  274,681
  329,918
  391,277
  458,728
  532,192
  611,559
  696,700
  787,479
  883,762
  985,431
  1,092,386
  1,204,556
  1,321,898
  1,444,403
  1,572,097
  1,705,042
  1,843,336
  1,987,112
  2,136,540
  2,291,820
  2,453,188
  2,620,911
  2,795,287
Revenue / Adjusted assets
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
Average production assets, $m
  24,656
  33,678
  44,936
  58,681
  75,129
  94,457
  116,800
  142,248
  170,854
  202,630
  237,561
  275,605
  316,707
  360,799
  407,810
  457,672
  510,323
  565,712
  623,801
  684,569
  748,010
  814,139
  882,987
  954,605
  1,029,062
  1,106,446
  1,186,860
  1,270,428
  1,357,286
  1,447,590
Working capital, $m
  4,157
  5,678
  7,576
  9,893
  12,666
  15,925
  19,691
  23,982
  28,804
  34,162
  40,051
  46,465
  53,394
  60,828
  68,753
  77,159
  86,036
  95,374
  105,167
  115,412
  126,108
  137,257
  148,864
  160,938
  173,491
  186,537
  200,094
  214,183
  228,827
  244,051
Total debt, $m
  17,365
  25,291
  35,183
  47,260
  61,711
  78,692
  98,323
  120,682
  145,815
  173,733
  204,423
  237,849
  273,962
  312,701
  354,005
  397,814
  444,073
  492,738
  543,775
  597,166
  652,905
  711,006
  771,496
  834,420
  899,838
  967,828
  1,038,480
  1,111,903
  1,188,217
  1,267,558
Total liabilities, $m
  21,663
  29,589
  39,481
  51,558
  66,009
  82,990
  102,621
  124,980
  150,113
  178,031
  208,721
  242,147
  278,260
  316,999
  358,303
  402,112
  448,371
  497,036
  548,073
  601,464
  657,203
  715,304
  775,794
  838,718
  904,136
  972,126
  1,042,778
  1,116,201
  1,192,515
  1,271,856
Total equity, $m
  25,948
  35,442
  47,291
  61,756
  79,066
  99,406
  122,919
  149,701
  179,805
  213,246
  250,007
  290,045
  333,300
  379,702
  429,176
  481,650
  537,060
  595,351
  656,483
  720,434
  787,199
  856,793
  929,248
  1,004,618
  1,082,976
  1,164,414
  1,249,042
  1,336,988
  1,428,397
  1,523,432
Total liabilities and equity, $m
  47,611
  65,031
  86,772
  113,314
  145,075
  182,396
  225,540
  274,681
  329,918
  391,277
  458,728
  532,192
  611,560
  696,701
  787,479
  883,762
  985,431
  1,092,387
  1,204,556
  1,321,898
  1,444,402
  1,572,097
  1,705,042
  1,843,336
  1,987,112
  2,136,540
  2,291,820
  2,453,189
  2,620,912
  2,795,288
Debt-to-equity ratio
  0.670
  0.710
  0.740
  0.770
  0.780
  0.790
  0.800
  0.810
  0.810
  0.810
  0.820
  0.820
  0.820
  0.820
  0.820
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
Adjusted equity ratio
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7,853
  12,976
  19,396
  27,254
  36,673
  47,756
  60,577
  75,187
  91,614
  109,866
  130,048
  151,902
  175,511
  200,837
  227,838
  256,475
  286,712
  318,521
  351,879
  386,776
  423,208
  461,184
  500,724
  541,857
  584,622
  629,072
  675,267
  723,278
  773,184
  825,075
Depreciation, amort., depletion, $m
  5,093
  6,897
  9,149
  11,898
  15,187
  19,053
  23,521
  28,611
  34,332
  40,687
  47,512
  55,121
  63,341
  72,160
  81,562
  91,534
  102,065
  113,142
  124,760
  136,914
  149,602
  162,828
  176,597
  190,921
  205,812
  221,289
  237,372
  254,086
  271,457
  289,518
Funds from operations, $m
  12,946
  19,873
  28,544
  39,151
  51,861
  66,809
  84,098
  103,798
  125,947
  150,553
  177,561
  207,023
  238,853
  272,997
  309,400
  348,009
  388,777
  431,663
  476,640
  523,690
  572,810
  624,012
  677,321
  732,777
  790,435
  850,361
  912,639
  977,363
  1,044,641
  1,114,593
Change in working capital, $m
  1,190
  1,521
  1,898
  2,317
  2,773
  3,259
  3,767
  4,290
  4,823
  5,357
  5,889
  6,414
  6,929
  7,433
  7,926
  8,406
  8,877
  9,338
  9,793
  10,245
  10,696
  11,149
  11,607
  12,074
  12,553
  13,046
  13,557
  14,089
  14,644
  15,224
Cash from operations, $m
  11,756
  18,352
  26,646
  36,834
  49,088
  63,550
  80,331
  99,508
  121,124
  145,196
  171,672
  200,609
  231,923
  265,563
  301,474
  339,603
  379,900
  422,325
  466,846
  513,445
  562,114
  612,863
  665,714
  720,703
  777,882
  837,315
  899,082
  963,274
  1,029,997
  1,099,369
Maintenance CAPEX, $m
  -3,521
  -4,931
  -6,736
  -8,987
  -11,736
  -15,026
  -18,891
  -23,360
  -28,450
  -34,171
  -40,526
  -47,512
  -55,121
  -63,341
  -72,160
  -81,562
  -91,534
  -102,065
  -113,142
  -124,760
  -136,914
  -149,602
  -162,828
  -176,597
  -190,921
  -205,812
  -221,289
  -237,372
  -254,086
  -271,457
New CAPEX, $m
  -7,052
  -9,022
  -11,259
  -13,745
  -16,448
  -19,328
  -22,343
  -25,449
  -28,605
  -31,776
  -34,931
  -38,045
  -41,102
  -44,092
  -47,011
  -49,862
  -52,651
  -55,389
  -58,089
  -60,768
  -63,441
  -66,129
  -68,848
  -71,618
  -74,457
  -77,384
  -80,415
  -83,567
  -86,859
  -90,304
Cash from investing activities, $m
  -10,573
  -13,953
  -17,995
  -22,732
  -28,184
  -34,354
  -41,234
  -48,809
  -57,055
  -65,947
  -75,457
  -85,557
  -96,223
  -107,433
  -119,171
  -131,424
  -144,185
  -157,454
  -171,231
  -185,528
  -200,355
  -215,731
  -231,676
  -248,215
  -265,378
  -283,196
  -301,704
  -320,939
  -340,945
  -361,761
Free cash flow, $m
  1,184
  4,400
  8,652
  14,102
  20,904
  29,196
  39,097
  50,699
  64,069
  79,249
  96,215
  115,052
  135,700
  158,130
  182,303
  208,179
  235,715
  264,872
  295,615
  327,917
  361,759
  397,133
  434,038
  472,488
  512,504
  554,119
  597,378
  642,335
  689,053
  737,608
Issuance/(repayment) of debt, $m
  6,210
  7,926
  9,892
  12,076
  14,451
  16,982
  19,630
  22,359
  25,133
  27,919
  30,690
  33,426
  36,112
  38,739
  41,304
  43,809
  46,259
  48,665
  51,037
  53,390
  55,740
  58,101
  60,490
  62,924
  65,418
  67,989
  70,653
  73,423
  76,314
  79,341
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  
  6,210
  7,926
  9,892
  12,076
  14,451
  16,982
  19,630
  22,359
  25,133
  27,919
  30,690
  33,426
  36,112
  38,739
  41,304
  43,809
  46,259
  48,665
  51,037
  53,390
  55,740
  58,101
  60,490
  62,924
  65,418
  67,989
  70,653
  73,423
  76,314
  79,341
Total cash flow (excl. dividends), $m
  7,393
  12,326
  18,544
  26,178
  35,355
  46,178
  58,727
  73,058
  89,202
  107,168
  126,905
  148,479
  171,813
  196,869
  223,607
  251,988
  281,974
  313,536
  346,652
  381,307
  417,499
  455,234
  494,528
  535,412
  577,922
  622,109
  668,031
  715,757
  765,368
  816,949
Retained Cash Flow (-), $m
  -7,421
  -9,494
  -11,849
  -14,465
  -17,310
  -20,341
  -23,513
  -26,782
  -30,104
  -33,441
  -36,761
  -40,038
  -43,255
  -46,402
  -49,474
  -52,474
  -55,410
  -58,291
  -61,133
  -63,951
  -66,765
  -69,593
  -72,455
  -75,370
  -78,358
  -81,438
  -84,628
  -87,946
  -91,409
  -95,035
Prev. year cash balance distribution, $m
  94
  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
  67
  2,832
  6,695
  11,713
  18,045
  25,837
  35,214
  46,276
  59,098
  73,727
  90,144
  108,441
  128,557
  150,467
  174,133
  199,513
  226,565
  255,245
  285,519
  317,356
  350,734
  385,640
  422,073
  460,041
  499,564
  540,671
  583,403
  627,812
  673,958
  721,914
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
  64
  2,592
  5,827
  9,644
  13,987
  18,751
  23,790
  28,924
  33,949
  38,652
  42,808
  46,275
  48,880
  50,514
  51,123
  50,701
  49,297
  47,006
  43,962
  40,326
  36,277
  31,998
  27,663
  23,431
  19,434
  15,774
  12,521
  9,713
  7,357
  5,436
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 (MU)

Valuation Ratios
P/E Ratio 9.8
Price to Sales 2.5
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 6.1
Price to Free Cash Flow 14.7
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 $20322 million for the last fiscal year's total revenue generated by Micron Technology. The default revenue input number comes from 0001 income statement of Micron Technology. 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 40.1% 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, 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.
    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 28.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8945 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 5.7% for Micron Technology.

Corporate tax rate of 27% is the nominal tax rate for Micron Technology. 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 86.6%.

Life of production assets of 4.7 years is the average useful life of capital assets used in Micron Technology 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 14.6%. 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 - $18621 million for Micron Technology - 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 1159.77 million for Micron Technology 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 at the current share price and the inputted number of shares is $52.3 billion.

RELATED COMPANIES Price Int.Val. Rating
INTC Intel 46.15 41.31  hold
GSIT GSI Technology 6.51 2.90  str.sell
WDC Western Digita 58.39 187.41  str.buy
RMBS Rambus 11.12 9.74  hold
PLAB Photronics 9.70 37.73  str.buy

COMPANY NEWS

▶ Wednesday Wrap-Up: What Is Tilray Smoking?   [02:50PM  TheStreet.com]
▶ Tepper Is Bullish on Micron Stock, but Should You Be Too?   [Sep-18-18 11:58PM  InvestorPlace]
▶ 1 Thing to Remember About Micron   [Sep-17-18 09:15PM  Motley Fool]
▶ Wall Street Retreats Monday   [05:10PM  GuruFocus.com]
▶ Three big names in the blitz   [01:56PM  CNBC Videos]
▶ Lower Memory Prices Will Hurt These 3 Companies   [Sep-16-18 11:32AM  Motley Fool]
▶ 3 Incredibly Cheap Technology Stocks   [Sep-15-18 11:29AM  Motley Fool]
▶ 3 Earnings Reports to Watch Next Week   [10:22AM  InvestorPlace]
▶ Yahoo Finance Live   [03:24PM  Yahoo Finance Video]
▶ Avoid Intel Stock Despite Steep Decline   [10:15AM  Investopedia]
▶ Micron slumps while Altria and Chevron climb   [04:28PM  Associated Press]
▶ Micron's Dive: Time to Wait   [03:04PM  TheStreet.com]
▶ Indexes Down As These 5 Tech Stocks Defy Nasdaq Decline   [02:30PM  Investor's Business Daily]
▶ There Is No Rush to Buy Micron   [10:54AM  TheStreet.com]
▶ The First Signs of Trouble Emerge for Micron   [Sep-11-18 09:30PM  Motley Fool]
▶ Micron Stock Is on Sale Again Go Long   [12:01PM  InvestorPlace]
▶ The Run in Qualcomm Stock Looks to Be at an End   [Sep-10-18 05:58PM  InvestorPlace]
▶ How to Go Long Micron Safely   [08:52AM  InvestorPlace]
▶ 3 Top Tech Stocks to Buy in September   [08:00AM  Motley Fool]
▶ Semi Sell-Off Offers Opportunity   [07:00AM  Morningstar]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.