Micron Technology stock fell 3.5 percent in after-hours trading yesterday after the company posted its earnings results for fiscal 2020's fourth quarter (ended Sept. 3). The chipmaker's results were better than expected, but a weak outlook for the first quarter pushed its stock price down.
Micron's Q4 earnings results
In the fourth quarter, Micron reported adjusted EPS of $1.08, compared with $0.56 in the fourth quarter of fiscal 2019. The adjusted EPS beat analysts’ average estimate of $0.98. Micron generated sales of $6.06 billion in the fourth quarter, 24.4 percent more than it did in the fourth quarter of fiscal 2019. The company beat analysts’ average sales estimate of $5.89 million. The company benefited from strong cloud and consumer sales amid the coronavirus pandemic.
Micron cautioned that it doesn’t know when the company will obtain a permit to continue selling products to Huawei. Huawei has been blocked by the Trump administration from acquiring U.S. chip products on national security concerns. Huawei is one of Micron’s largest customers. Micron’s sales to Huawei accounted for about 10 percent of total sales in the fourth quarter.
In Micron's fourth-quarter earnings conference call, CEO Sanjay Mehrotra said, “We expect calendar 2021 industry DRAM bit demand growth of approximately 20%. We further expect that disciplined industry CapEx will result in improving DRAM market conditions and industry profitability throughout calendar 2021.”
Micron stock falls after hours
Yesterday, Micron stock fell 3.5 percent in after-hours trading. The stock fell after the company issued a weak outlook for the first quarter due to economic uncertainty. Micron expects revenue of $5.0 billion–$5.4 billion in the first quarter, and adjusted EPS of $0.40–$0.54. In comparison, Wall Street analysts expect Micron to post revenue of $5.27 billion and adjusted EPS of $0.66 in the first quarter.
What is Micron's stock price today?
Micron stock was down about 4.9 percent at $48.25 in premarket trading today as of this article's writing. The stock rose 2 percent yesterday and closed at $50.71 with a market capitalization of $56.3 billion. Micron stock has risen by 1.7 percent in the last five days and 20.8 percent in the last year.
Micron stock is trading 17.1 percent below its 52-week high of $61.19 and 62.9 percent above its 52-week low of $31.13. Year-to-date, the stock had fallen by 5.7 percent as of yesterday.
Should I buy Micron stock?
Currently, analysts' stock price forecast for Micron is $63.47, which suggests a 25.2 percent upside. The highest target price of $100 implies a 57.6 percent upside, while the lowest target of $35 suggests a 31 percent downside. Among the 31 Wall Street analysts tracking Micron, 28 recommend "buy," three recommend "hold," and none recommend "sell."