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If you are wondering whether Micron Technology’s share price reflects its true worth, or if the market has run ahead of itself, you are not alone in asking that question right now.
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The stock most recently closed at US$362.75, with returns of 4.9% over 7 days, 36.4% over 30 days, 15.0% year to date, 244.2% over 1 year and a very large gain over 3 years.
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Recent news coverage has focused on Micron Technology as a key name in high performance memory and storage for areas such as artificial intelligence and data centers, which has kept investor attention on the stock. Commentary has also highlighted how sentiment around semiconductor demand and capacity spending is feeding into how investors are thinking about future cash flows and risk for the company.
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Right now Micron Technology holds a valuation score of 3 out of 6, so we will look at what different valuation methods say about that score, and then finish by discussing a more complete way to think about valuation beyond any single model.
A Discounted Cash Flow model estimates what a company could be worth today by projecting its future cash flows and discounting them back to the present using a required return.
For Micron Technology, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $5.8b. Analyst based and extrapolated projections from Simply Wall St show free cash flow estimates such as $20.7b in 2026 and $20.4b in 2030, with values for the years in between and beyond also modeled in billions of dollars.
When all of those projected cash flows are discounted back to today, the DCF model suggests an intrinsic value of about $191.79 per share. Compared with the recent share price of US$362.75, this implies Micron Technology is 89.1% overvalued on this DCF view.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Micron Technology may be overvalued by 89.1%. Discover 875 undervalued stocks or create your own screener to find better value opportunities.
For a profitable company, the P/E ratio is a useful shorthand because it tells you how many dollars investors are currently paying for each dollar of earnings. The level that seems reasonable usually reflects what investors expect for future growth and how much risk they see in those earnings.
