How is micron still trading at such a low forward P/E?
with revenue increasing 75%, profit increasing 163%, profit margin up to 57% from 38%.
How on earth is Forward P/E still less than 5?
They have confirmed contracts big tech through 2027.
Yes cyclical stock. BUT THE CYCLE IS NOW
What is the uncertainty about this stock on big market movers’ mind that I am missing? Please provide wisdom
the forward looking stock market should have priced in this shit to at least 15 forward p/e by now based on sector averages i think
What is the reason micron price hasnt moved up? (Is it just market irrationality)
Micron is still super undervalued or nah?
byu/Old_Research_3436 instocks
Posted by Old_Research_3436
4 Comments
I sold at 445 in January, this is the top now, I am the messiah.
Yes
It’s not undervalued. Do the math. A 5 forward PE means EPS of ~$90 is anticipated. The uncertainty is simple – is the market really expecting these earnings to stay (or even happen for that matter)? No. Otherwise, it wouldn’t be at a forward PE of 5. Nobody knows when the earnings will collapse, at some point they will. The hyperscalers will not continue to spend 400-700B per annum indefinitely. As soon as they will announce a slowdown of cap ex or there is suddenly a slew of cancellations of data centers (there already is a number of them being cancelled), the stock will plummet in anticipation of plummeting earnings. It’s not necessarily cheap.
If earnings drop from $90 per share estimated to $5 per share, suddenly your 5 forward PE becomes a 90 PE. See the problem now?
The uncertainty you’re missing is that these earnings are highly uncertain. If this $90 EPS was recurring revenue with <1% churn rate; that’s an entirely different story. Instead, it’s a peak semiconductor cycle that can stop at any moment.
It’s the market maker programming. They’re reading fomo instead of valuation. Acting like it’s late stage breakout ahead of a major correction while it’s behaving already like the only corrected valuation in the whole entire market even though it’s up huge.