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Wall Street JournalCompetitor Analysis: Evaluating Micron Technology And Competitors In Semiconductors & Semiconductor Equipment Industry
Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Micron Technology (NASDAQ:MU) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Micron Technology Background
Micron is one of the largest semiconductor companies in the world, specializing in memory and storage chips. Its primary revenue stream comes from dynamic random access memory, or DRAM, and it also has minority exposure to not-and or NAND, flash chips. Micron serves a global customer base, selling chips into data centers, mobile phones, consumer electronics, and industrial and automotive applications. The firm is vertically integrated.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Micron Technology Inc | 27.07 | 5.45 | 7.60 | 9.28% | $8.35 | $7.65 | 56.65% |
| NVIDIA Corp | 47.16 | 38.95 | 25.03 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 73.82 | 20.54 | 26.75 | 11.02% | $9.86 | $12.25 | 28.18% |
| Taiwan Semiconductor Manufacturing Co Ltd | 31.49 | 9.90 | 13.63 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 112.56 | 5.76 | 10.96 | 2.06% | $2.11 | $4.78 | 35.59% |
| Qualcomm Inc | 34.89 | 8.83 | 4.36 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 603.33 | 1.62 | 2.98 | 3.98% | $7.85 | $5.22 | 2.78% |
| Texas Instruments Inc | 32.22 | 9.67 | 9.38 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.71 | 4.01 | 12.48 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 141.37 | 15.80 | 26.64 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 30.40 | 5.21 | 9.63 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 27.55 | 5.58 | 4.72 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.28 | 12.71 | 17.12 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 31.97 | 3.41 | 1.74 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.70 | 3.21 | 5.74 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 124.85 | 20.34 | 34.75 | 7.99% | $0.09 | $0.18 | 272.08% |
| STMicroelectronics NV | 45.24 | 1.31 | 2.07 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 75.25 | 2.80 | 3.71 | 3.22% | $0.44 | $0.59 | -11.98% |
| United Microelectronics Corp | 14.96 | 1.76 | 2.65 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 70.29 | 4.79 | 9.11 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 380.90 | 14.75 | 21.27 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 44.81 | 7.86 | 15.09 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 96.61 | 9.47 | 12.37 | 5.41% | $39.29 | $34.15 | 32.03% |
Through a thorough examination of Micron Technology, we can discern the following trends:
The stock's Price to Earnings ratio of 27.07 is lower than the industry average by 0.28x, suggesting potential value in the eyes of market participants.
Considering a Price to Book ratio of 5.45, which is well below the industry average by 0.58x, the stock may be undervalued based on its book value compared to its peers.
Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 7.6, which is 0.61x the industry average.
The company has a higher Return on Equity (ROE) of 9.28%, which is 3.87% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.35 Billion is 0.21x below the industry average, suggesting potential lower profitability or financial challenges.
The company has lower gross profit of $7.65 Billion, which indicates 0.22x below the industry average. This potentially indicates lower revenue after accounting for production costs.
The company's revenue growth of 56.65% is notably higher compared to the industry average of 32.03%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When comparing Micron Technology with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
Compared to its top 4 peers, Micron Technology has a stronger financial position indicated by its lower debt-to-equity ratio of 0.21.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Micron Technology in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios are low compared to peers, indicating potential undervaluation. On the other hand, the high ROE and revenue growth suggest strong performance relative to industry standards. However, the low EBITDA and gross profit may raise concerns about operational efficiency and profitability.
This article was generated by Benzinga's automated content engine and reviewed by an editor.