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When Should You Buy Micron Technology, Inc. (NASDAQ:MU)?

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Let's talk about the popular Micron Technology, Inc. (NASDAQ:MU). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$84.98 at one point, and dropping to the lows of US$70.23. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Micron Technology's current trading price of US$73.97 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Micron Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Micron Technology

What's the opportunity in Micron Technology?

The stock is currently trading at US$73.97 on the share market, which means it is overvalued by 27% compared to my intrinsic value of $58.22. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Micron Technology’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Micron Technology generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Micron Technology. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in MU’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MU should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MU for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MU, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Micron Technology as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Micron Technology, and understanding this should be part of your investment process.

If you are no longer interested in Micron Technology, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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