Micron: Why Q4 Results Didn't Get Me Excited (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Micron is seeing growth in the HBM market but management's market share outlook of ~20% has negatively surprised me; I expected it to be higher given Samsung's lagging position.
• I believe the main positive surprise in Q4 was better gross margins delivery due to cost savings in DRAM production and better HBM yields. This is expected to continue.
• Micron still trades at a modest 32% premium vs its memory peers. I am not sure if this is justified as I doubt overall outperformance vs its competition.
• Despite a positive earnings reaction, the longer-term relative technicals vs the S&P500 point to a range-bound scenario with no clear bullish direction.
• HBM market share dynamics, capex intensity and FCF margins are key monitorables to track.

Read the full article here.