Micron Technology (MU): fair value

Fair-value band

The normal range for this name runs from $-340 (cheap) to $1,670 (expensive); it is now priced at $911.

Is Micron Technology undervalued?

Fair. Micron Technology trades at $911, 37% above the fair value this model estimates; the normal range for this name runs from $-340 (cheap) to $1,670 (expensive).

Diligence checklist

6 pass · 3 fail · 2 no data

• PASSCash actually collected from profit, last 12 months: 205%XBRL · Micron Technology gets $2.05 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign.
• PASSGap between paper profit and real cash: -3.4%XBRL · Micron Technology's "profit on paper" and "cash in the bank" gap is small enough to pass.
• PASSDebt compared to one year of cash earnings: -0.33xXBRL · Micron Technology holds more cash than debt, so there is no leverage question to answer here. A balance sheet in this shape can fund a bad year out of its own pocket instead of asking a lender for permission.
• PASSHow much more it earns on capital than that capital costs: +42.56ppXBRL · Return on capital is far higher than what that capital costs, so every dollar Micron Technology puts to work turns into much more than a dollar of value. A +43 point gap is enormous. This is one of the best capital-compounding machines that exists. The gap is wider than it was at the start of the window.
• FAILStock sold by executives and directors on the open market, last 6 months: $18.0MEDGAR (dealbreaker) · Sadana Sumit sold $14.0M of stock in the last 6 months, outside any pre-planned selling schedule, and $18.0M went out that way in total. My rulebook says more than $5 million of this kind of selling is disqualifying for a "long" position (buying the stock). The full list of open-market sellers: Sadana Sumit $14.0M, Gomo Steven J $1.6M, Dugle Lynn A $1.5M. A further $261.3M went out under pre-planned 10b5-1 schedules, which I don't count: those sales are set up months ahead and say nothing about what management thinks today. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• N/AHow long the CEO has run this company: n/aTEXT · I couldn't establish when Micron Technology's current chief executive took the job: no appointment appears in the 8-K item 5.02 history.
• FAILProfit margin held up during the last sales slump: -5.8% vs 44.2% baseXBRL · The last time Micron Technology's revenue fell, its profit margin per unit sold dropped from about 44.2% to -5.8%, giving up 113% of the margin it went in with. That looks like discounting to hold volume, which is the opposite of pricing power: a business customers won't leave doesn't have to pay them to stay. This is the accounts talking, not the filing: I'm reading the 6 quarters from December 2022 to February 2024, measured against the year going into it, and a shift in what the company sold can imitate pricing power either way.
• FAILNormal profit margin across a full business cycle: FCF margin 44.3% vs 4.8% medianXBRL · Micron Technology is earning a 44.3% cash margin against a long-run average of 4.8%, 824% better than normal. This is what a cycle peak looks like, and paying for peak margins as though they were permanent is the classic way to overpay for a good business. My valuation grows the average instead. Across the window the margin ran between -37.2% in August 2023 and 44.3% in September 2026.
• N/AHow much of the stock trades on an average day: $26,160MMARKET · Micron Technology trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• PASSShare of revenue from its single biggest customer: no customer 10%+ of revenue disclosedTEXT · Micron Technology's October 9, 2026 10-K doesn't disclose any customer at 10% or more of revenue. The accounting rules require that disclosure only when it applies, so its absence means no single customer clears that bar, which is well inside the quarter of revenue where I stop work. This comes from the filing's prose rather than a tagged number: the percentages sit in an XBRL field the SEC's bulk data drops. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. Micron Technology hasn't changed auditors in the last 2 years, so there's no such red flag here.