Published on March 8th, 2022 📆 | 5867 Views ⚑
0Why Has Micron Technology Stock Returned 2.5x Since 2018 Despite Stagnant Revenue Growth?
Micron Technology (NASDAQ: MU) stock price grew more than 2.5x from around $32 in 2018 end to over $80 currently, primarily due to favorable changes in its P/S multiple. This comes as a surprise, as the company has witnessed a drop in revenue over this period, and revenue per share has remained roughly unchanged, helped by a slight decrease in the outstanding share count.
In our interactive dashboard, Why Micron Technology Stock Moved: MU Stock Has Gained 158% Since 2018, we break down the factors behind this move.
MUâs Total Revenue has dropped 2.5% from $30.4 billion in 2018 to $29.6 billion on an LTM basis
- MUâs total revenue first dropped from $30.4 billion in FY â18 (MUâs fiscal year ends in August) to $21.4 billion in FY â20, primarily due to the semiconductor supply glut and the pandemic hampering sales.
- Revenues then recovered to as high as $27.7 billion in FY â21, and currently stand even higher at $29.6 billion on an LTM basis.
- DRAM semiconductor sales make up the bulk of Micronâs revenues, with $20 billion of the companyâs sales coming from this segment as of FY â21, making up more than 70% of total revenue.
- For details about MU revenues and comparison to peers, see Micron Technology Revenue Comparison
Revenue per share increased marginally from $26.38 in 2018 to $26.46 currently
- MU revenue dropped from $30.4 billion in 2018 to $29.6 billion currently, while the outstanding share count decreased from 1.2 billion in 2018 to 1.1 billion currently.
- Due to this, RPS has risen only marginally from $26.38 in FY â18 to $26.46 currently.
Price-To-Sales (P/S) multiple for MU rose steadily from 1.3x in 2018 to 4.3x in 2020, but stands at 3.1x currently, still more than 2x higher than its 2018 level
- Despite Micronâs inconsistent performance since 2018-end, its P/S multiple increased from 1.3x in 2018 to over 4x in 2020.
- However, with Micronâs revenues recovering since FY â20, the P/S multiple has pulled back and currently stands at around 3x.
- For additional details about the companyâs historical returns and comparison to peers, see Micron Technology Stock Return.
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