How risky is to double down on Micron Technology in June?

Volatility is the spice of the stock market, and Micron Technology (NASDAQ:MU) has had its fair share of it. However, a potential decrease in the company's above-average volatility is expected in June, presenting an intriguing investment opportunity. As a leading player in the Semiconductors industry, Micron's share price has been on a roller coaster ride, with a Day Typical Price of $131.75 and a Valuation Market Value of $132.67. Analysts are bullish about Micron's future, with the Analyst Overall Consensus rating the stock as a 'Strong Buy.' This positive sentiment is backed by 25 'Strong Buy' ratings, 9 'Buy' ratings, and only 1 'Sell' rating. Furthermore, the Analyst Target Price Estimated Value stands at $73.98, with the highest estimated target price reaching up to $82.12. The company's robust fundamentals and promising outlook, coupled with a potential decrease in volatility, could offer a compelling entry point for investors. However, potential investors should keep an eye on the Market Facilitation Index, currently at 4.03, which may indicate future price changes. Also, with a Period Momentum Indicator of 3.18 and a Daily Balance Of Power of 0.7891, the stock's momentum seems to be on the uptick. In conclusion, while the stock market is inherently unpredictable, the expected decrease in Micron Technology's volatility combined with its strong fundamentals and bullish analyst consensus could present an attractive investment opportunity in June. Based on historical return distribution, Micron Technology's stock is less risky than 27% of other stocks. However, it's projected that 87% of all equities will outperform Micron in generating investment returns over the next 90 days. While risk-tolerant traders may disregard current market volatility, it's prudent to assess the investment risk associated with Micron Technology. This year could present a different scenario for Micron Technology shareholders.
Published over two weeks ago
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Reviewed by Vlad Skutelnik

Micron Technology has reported approximately $9.33 billion in cash, with a positive cash flow from operations of $1.56 billion. This results in a cash-per-share (CPS) ratio of 8.58.

Key Discoveries

Micron Technology's (NASDAQ:MU) stock, with its current open price at $129.49, has demonstrated a higher than average volatility in the past, as indicated by its Coefficient of Variation of 430.1. However, a potential decrease in this above-average volatility is expected in June, presenting an attractive investment opportunity. The company's Jensen Alpha, a measure of risk-adjusted performance, stands at 0.7167, indicating that the stock has provided a reasonable return given the risk taken. With the possibility of reduced volatility, Micron's stock could offer a more stable and potentially profitable investment for those looking to invest in the semiconductors industry.
Volatility is a rate at which the price of Micron Technology or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Micron Technology may increase or decrease. In other words, similar to Micron's beta indicator, it measures the risk of Micron Technology and helps estimate the fluctuations that may happen in a short period of time. So if prices of Micron Technology fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is Micron Technology's Liquidity

Micron Technology financial leverage refers to using borrowed capital as a funding source to finance Micron Technology ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Micron Technology financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Micron Technology's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Micron Technology's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Micron Technology's total debt and its cash.

Micron Technology Gross Profit

Micron Technology Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Micron Technology previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Micron Technology Gross Profit growth over the last 10 years. Please check Micron Technology's gross profit and other fundamental indicators for more details.

Micron Technology Volatility Drivers

Micron Technology unsystematic risk is unique to Micron Technology and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Micron Technology you can also buy Intel. You can also mitigate this risk by investing in the information technology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Micron Technology important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Micron Technology income statement and balance sheet. Here are more details about Micron volatility.
0.140.320.590.720.730.530.09-0.160.49-0.23-0.230.65-0.620.040.470.670.760.65-0.040.88-0.5-0.02
0.140.030.12-0.250.42-0.41-0.66-0.7-0.490.080.080.55-0.57-0.72-0.420.21-0.28-0.22-0.220.420.39-0.04
0.320.030.460.390.00.550.510.40.16-0.45-0.450.00.020.250.230.110.490.23-0.250.33-0.230.58
0.590.120.460.380.30.70.30.120.21-0.84-0.840.09-0.1-0.04-0.050.290.470.02-0.540.610.10.27
0.72-0.250.390.380.40.660.420.230.48-0.1-0.10.3-0.270.590.890.720.940.910.420.52-0.860.33
0.730.420.00.30.40.03-0.4-0.580.150.210.210.87-0.85-0.370.190.770.290.440.130.72-0.23-0.26
0.53-0.410.550.70.660.030.840.680.53-0.67-0.67-0.210.240.590.460.180.760.39-0.190.29-0.420.48
0.09-0.660.510.30.42-0.40.840.960.47-0.52-0.52-0.580.620.790.43-0.220.540.23-0.13-0.18-0.40.59
-0.16-0.70.40.120.23-0.580.680.960.34-0.43-0.43-0.730.760.780.32-0.390.340.08-0.1-0.41-0.290.58
0.49-0.490.160.210.480.150.530.470.34-0.18-0.18-0.030.070.480.490.120.550.440.040.17-0.5-0.21
-0.230.08-0.45-0.84-0.10.21-0.67-0.52-0.43-0.181.00.38-0.37-0.140.210.23-0.310.260.75-0.24-0.24-0.4
-0.230.08-0.45-0.84-0.10.21-0.67-0.52-0.43-0.181.00.38-0.37-0.140.210.23-0.310.260.75-0.24-0.24-0.4
0.650.550.00.090.30.87-0.21-0.58-0.73-0.030.380.38-0.99-0.510.170.760.210.450.240.78-0.21-0.25
-0.62-0.570.02-0.1-0.27-0.850.240.620.760.07-0.37-0.37-0.990.56-0.12-0.77-0.16-0.4-0.25-0.780.150.26
0.04-0.720.25-0.040.59-0.370.590.790.780.48-0.14-0.14-0.510.560.75-0.070.620.530.3-0.3-0.730.42
0.47-0.420.23-0.050.890.190.460.430.320.490.210.210.17-0.120.750.530.830.950.630.21-0.990.26
0.670.210.110.290.720.770.18-0.22-0.390.120.230.230.76-0.77-0.070.530.520.710.540.7-0.48-0.01
0.76-0.280.490.470.940.290.760.540.340.55-0.31-0.310.21-0.160.620.830.520.830.160.56-0.820.41
0.65-0.220.230.020.910.440.390.230.080.440.260.260.45-0.40.530.950.710.830.620.45-0.950.18
-0.04-0.22-0.25-0.540.420.13-0.19-0.13-0.10.040.750.750.24-0.250.30.630.540.160.62-0.13-0.58-0.12
0.880.420.330.610.520.720.29-0.18-0.410.17-0.24-0.240.78-0.78-0.30.210.70.560.45-0.13-0.230.05
-0.50.39-0.230.1-0.86-0.23-0.42-0.4-0.29-0.5-0.24-0.24-0.210.15-0.73-0.99-0.48-0.82-0.95-0.58-0.23-0.24
-0.02-0.040.580.270.33-0.260.480.590.58-0.21-0.4-0.4-0.250.260.420.26-0.010.410.18-0.120.05-0.24
Click cells to compare fundamentals

Detailed Outlook On Micron Technology

Micron Technology generated the yearly revenue of 15.54 B. Annual Net Loss to common stockholders was (5.83 B) with gross Loss of (1.42 B). Every cloud has a silver lining, and the expected decrease in Micron Technology's (NASDAQ:MU) above-average volatility in June could be just that for savvy investors. With a current ratio of 2.89X and a robust net asset value of $64.25B, the company's financial health appears strong. Despite a downside deviation of 2.25 and a semi variance of 3.15, the company's risk-adjusted performance of 0.1552 and a Sortino ratio of 0.3163 suggest that the potential rewards could outweigh the risks. Furthermore, with 84.66% of shares owned by institutions, there is significant confidence in the company's long-term prospects. Therefore, the anticipated decrease in volatility could present an attractive investment opportunity in Micron Technology.

Are Micron Technology technical ratios showing a correction?

The recent drop in Micron Technology's Value At Risk (VaR) to -3.78 could indicate a potential price decline. This technical ratio, used to gauge investment risk, suggests that Micron's stock may be due for a correction. Investors should monitor this closely, as it could present a buying opportunity at a lower price or a warning of potential losses. Micron Technology currently exhibits below-average downside deviation, with an Information Ratio of 0.24 and Jensen Alpha of 0.72. Understanding market volatility trends can help investors time the market.
Correct use of volatility indicators can measure Micron Technology's stock risk against market volatility in both bullish and bearish trends. The increased volatility of bear markets can impact Micron Technology's stock price, causing investor stress as share values drop, often prompting portfolio rebalancing with different financial instruments.In conclusion, Micron Technology presents a compelling investment opportunity despite the modest market drop. With a strong analyst consensus of Strong Buy, backed by 25 strong buys, 9 buys, and only 1 sell, the stock appears robust. The company's valuation real value stands at $109.49, with a possible upside price of $126.54, indicating a potential for substantial growth. The analyst target price estimated value is $73.98, which is significantly lower than the naive expected forecast value of $123.48, suggesting that the market may be underestimating the stock's potential. Investors should consider these factors and their own risk tolerance before making a decision..

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