Competitor Analysis: Evaluating Micron Technology And Competitors In Semiconductors & Semiconductor Equipment Industry
In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Micron Technology (NASDAQ:MU) alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within 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 | 27.82 | 5.60 | 7.81 | 9.28% | $8.35 | $7.65 | 56.65% |
| NVIDIA Corp | 46.42 | 38.34 | 24.64 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 73.34 | 20.40 | 26.58 | 11.02% | $9.86 | $12.25 | 28.18% |
| Taiwan Semiconductor Manufacturing Co Ltd | 31.04 | 9.76 | 13.44 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 112.74 | 5.77 | 10.98 | 2.06% | $2.11 | $4.78 | 35.59% |
| Qualcomm Inc | 34.66 | 8.77 | 4.33 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 621.67 | 1.67 | 3.07 | 3.98% | $7.85 | $5.22 | 2.78% |
| Texas Instruments Inc | 31.95 | 9.59 | 9.30 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.27 | 3.98 | 12.39 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 142.13 | 15.88 | 26.79 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 30.55 | 5.23 | 9.67 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 27.19 | 5.51 | 4.65 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 23.70 | 12.41 | 16.72 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 32.48 | 3.46 | 1.76 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.28 | 3.15 | 5.63 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 124.93 | 20.35 | 34.77 | 7.99% | $0.09 | $0.18 | 272.08% |
| STMicroelectronics NV | 44.93 | 1.30 | 2.06 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 74.30 | 2.76 | 3.66 | 3.22% | $0.44 | $0.59 | -11.98% |
| United Microelectronics Corp | 14.79 | 1.74 | 2.62 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 69.75 | 4.75 | 9.03 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 372.90 | 14.44 | 20.82 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 45.09 | 7.91 | 15.18 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 96.91 | 9.39 | 12.29 | 5.41% | $39.29 | $34.15 | 32.03% |
By conducting an in-depth analysis of Micron Technology, we can identify the following trends:
A Price to Earnings ratio of 27.82 significantly below the industry average by 0.29x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 5.6, significantly falling below the industry average by 0.6x, it suggests undervaluation and the possibility of untapped growth prospects.
With a relatively low Price to Sales ratio of 7.81, which is 0.64x the industry average, the stock might be considered undervalued based on sales performance.
With a Return on Equity (ROE) of 9.28% that is 3.87% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.35 Billion, which is 0.21x below the industry average, the company may face lower profitability or financial challenges.
With lower gross profit of $7.65 Billion, which indicates 0.22x below the industry average, the company may experience lower revenue after accounting for production costs.
With a revenue growth of 56.65%, which surpasses the industry average of 32.03%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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.
In light of the Debt-to-Equity ratio, a comparison between Micron Technology and its top 4 peers reveals the following information:
Among its top 4 peers, Micron Technology has a stronger financial position with a lower debt-to-equity ratio of 0.21.
This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Micron Technology, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. On the other hand, the high ROE and revenue growth, along with low EBITDA and gross profit margins, suggest strong profitability and growth prospects relative to competitors in the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.