Thinking about Micron Technology and wondering if it’s time to buy, sell, or just sit tight? You’re not alone. The stock has been on an impressive run, leaving investors both excited and a little cautious as they consider the future. Over just the past week, Micron shares climbed 11.0%, with a stunning 41.3% jump for the past month. Look a bit further back and the numbers tell an even more compelling story: up 112.6% year-to-date and a hefty 81.8% across the past 12 months. Stretch that window to three and five years, and the price appreciation stands at 251.4% and 266.9%, respectively.
This performance hasn’t happened in a vacuum. There’s been a swell of major news that could reshape the industry, such as fresh U.S. efforts to incentivize domestic chip production, Japan’s $3.6 billion investment in Micron’s advanced DRAM facility, and shifting global trade dynamics. Each headline hints at both opportunities and risks for Micron. With growth that strong, investors have begun to reassess how much further the stock could rise or how much is already priced in.
Of course, price gains are just one part of the story; the real question is whether Micron is undervalued, overvalued, or somewhere in between right now. By the numbers, Micron scores a 3 on a six-point valuation scale, meaning it is undervalued by half of the major valuation checks we use. In the sections that follow, I’ll walk you through these valuation approaches in detail. Later, I’ll share an even more game-changing lens that could give you a clearer answer than any single metric ever could.
The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. In other words, the model looks at how much cash Micron Technology will generate over the coming years, then calculates what that future cash is worth right now.
Micron’s current Free Cash Flow (FCF) stands at $2.22 Billion. Looking ahead, analysts expect FCF to grow significantly, with projections reaching as high as $10.60 Billion by 2030. It is worth noting that while analysts provide estimates for up to five years, forecasts beyond that are extrapolated to give a more complete picture.
Based on these projections, the estimated intrinsic value per share calculated by the DCF model is $106.88. Compared to Micron’s current share price, this suggests the stock is about 73.7% overvalued at present. This means investors today would be paying well above what these long-term cash flow estimates would justify.
