저자: Daniel · 외국인
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마이크론은 DRAM 중심의 과점 구조지만 가격 하락이 지속되는 가격 수용자(price taker)다. 최근 가이던스가 매출 약 72억달러로 시장 기대(약 90억달러)를 크게 밑돌아 업황 둔화 우려가 커졌다. 잉여현금흐름은 순이익(약 150억달러 누적)보다 크게 낮은 약 60억달러 수준이라 주주 환원이 제한적이다. 시가총액 약 600억달러 기준 보수적 밸류에이션(마진 25~30%, 이익배수 8~12배)을 적용하면 손익분기~150% 상승 여지가 있다고 보나, 본인은 가격 결정력이 있는 기업을 선호해 매수에는 더 큰 상승 여력이 필요하다고 말함.
다듬은 글
micron stock reported their earnings earlier this week that were better than many expected yet still the stock went down because their outlook was weaker than expected and their weak outlook caused a broader sell-off in sympathy with the semiconductor space saying hey could this be part of a broader macro downturn i'll talk about that later on in this video but first let's try to understand what does micron mu stock even do because in order to figure out where does a stock potentially go in the future you need to figure out what is the underlying business look like this your first time tuning in my name is daniel you're watching unrivaled investing a no hype mission focus channel trying to find you exceptional companies and unrivaled investments so as we look at micron the way to think about it is their primary product is memory and storage they talk about designing developing and manufacturing industry leading members memory and storage solutions and how they're the fourth largest semiconductor company in the world their primary product about three quarters of their business is dynamic random access memory or dram which when combined with a cpu effectively makes computers possible you know they talk about when combined with a cpu the ability to run sets of instructions programs and store working data becomes possible simply put without these core products the core storage and memory solutions that they provide you know you wouldn't have basic compute computational abilities you wouldn't have basic functional technology around you without the memory and storage solutions that micron provides but the reality is it's not just them if you look at dram and in this video i'm primarily focusing on their dram solution because that's about three quarters of their business you look at what they're selling and the reality is it's an oligopoly and that is what i like to see when you see that there's only a few different competitors that means ideally it should be more rational over time now they're the smallest let's say of the top three when you look at them where samsung's like samsung is a top dog um but it is generally when you see less concentrate or excuse me a more concentrated industry you're generally going to get more pricing discipline over time or at least that's what you would expect and you also have this sort of tailwind where you say well if you're offering memory and storage solutions well what's going to be the need for that and you see the the just the amount of data creation and i think zettabytes or zettabytes has just continued to grown grow at an exponential rate so the world needs memory and storage solutions and they break it down by individual categories as well like data centers and they can you know break it down based on their different products about three quarters dram about one quarter nand and you can see yeah for data center this is a hyper growth segment where they think from 2020 fiscal 21 through 25 that's growing around 30 percent a year for both of these products based on in terms of bit demand dram bit demand if you look at mobile devices you know somewhere between teens to 24 i mean you're looking at some very great growth rates the the slowest growth is with sort of the legacy categories like personal computers but as you look at the internet of things you know in industrials you're looking at hyper growth rates you look at autos which is becoming increasingly connected you're looking at crazy growth rate 40 to 50 growth so this is this all pencils out to increasing bit demand of effectively teens bit growth rate for dram and high 20s for their nand so this this could pose you know great growth potential for micron in the years ahead the challenge is the biggest challenge is that long term and if you look back over let's say from 2016 through 2021 their dram pricing is actually down 20 and you see with nand it's been down nearly every single year from 2016 to 2021.
so that's part of the concern here is that this clearly reflects that they are a price taker they they they are not even though they operate in an oligopoly they have to deal with continually declining pricing and that competitive dynamic so even though there's only a few players it is still a ruthlessly cutthroat environment and part of the challenge is that you might be running but you're still just running in place and i think their financials really reflect that where you look at let's say the last three of their fiscal years and you see wow this company is generating a lot of profits and this is where a lot of folks are going to say yeah this trades at a cheap multiple to earnings because you look at it over the last five years yeah earnings you know the the earnings the the profitability is going to jump around 2.7 billion in 2020 6.3 billion in fiscal 2019 5.9 billion so billions of dollars in terms of profitability 15 billion over cumulatively over the last three fiscal years but the challenge is that they're constantly investing in to sort of expanding their capacity for memory and storage solutions which they have to do that sort of running and keeping in place they talk about investing 150 billion plus tens of billions of dollars in manufacturing and r d around the world to keep up with demand but the reality is do shareholders really benefit from that and you look back over the last three fiscal years and you see that yeah they did 15 billion in net income which is sort of this accounting figure but when it comes to real free cash flow that shareholders could see it was actually only 6 billion dollars so that's a huge difference partly because they have to constantly reinvest into new property you know plant and equipment new expansion just to sort of keep up because pricing does keep going lower so they have to constantly sell more so the question is where does micron stock go in the future first super quick where if you're looking for compelling investment ideas or want to take charge of your investment journey consider unrivaled investing.com thank you to all the unrivaled investing subscribers that keep this channel going and so part of the reason why micron stock was down was because they had a weak outlook and you know calling out particularly what they said they were talking about industry bit demand growth has moderated since our last earnings call seeing a significant reduction in near-term industry bit demand primarily attributable to end demand weakness in consumer markets i.e we're seeing a weak consumer including pc and smartphones so it's not only the legacy pc market which arguably had a nice bump because of you know covid where a lot of people going home hey you need to order that pc but smartphones as well people just aren't replacing them as quickly and they're talking about weakness and consumer spending once again a weak consumer in china russia ukraine war and rising inflation around the world you're going to see this theme i think a lot around you know various different industries where you know as you have inflation let's say with higher gas prices people are going to have to make that trade off oh do i really need to get a new phone or can i hold out for let's say a few more months because i don't really need it and that's kind of what i think you're seeing here with this weaker consumer when they talk about that rising inflation they also talk about the end demand in the mobile pc and consumer markets have weakened but some of their core markets being cloud networking automotive and industrial markets are showing resilience so we'll see how that plays out for the rest of the year so that is a nice component longer term those those segments should be more resilient more profitable for their business versus the highly cyclical consumer markets the challenge is their guidance reflects a lot more weakness than folks were expecting you know so they did around 8.6 billion in revenue this most recent quarter a lot of folks were expecting around 9 billion for the next quarter but they guided to around 7.2 billion in revenue so that's big difference about 2 billion difference and they had been operating at let's say around 30 plus profit margin and now they're saying yeah the cycle's turning folks now we're guiding to somewhere in the 20s you know i'm pencilling out somewhere in the high 20s but it might end up being a lot lower and that is scaring some investors sort of saying well where does this sort of shake out in the future and the reality is you might start asking well is this just a micron problem or is this a broader industry problem it's clearly a broader industry problem because you see samsung also in the headlines talking about sitting on 50 million unsold phones and so this does mean largely that i think you should expect a broader semiconductor slowdown this does sort of fit with the increasing calls for a recession so what you're seeing here is if you have all this inventory then all that sort of capital expenditures that you s that all these businesses have these these purchases that they make to expand capacity that is not going to happen and that's why the semiconductor industry is so volatile is because you're making these purchases that are effectively one time in nature you know hey whenever you want to expand capacity which you need to do because prices keep going down and so they're looking at this and so the challenge is what once you have inventory then you completely cut it cut it off you say hey we don't need to you know order any more new of these you know or or you know we're going to slow down on the purchases that's at the broader semiconductor sector for them you're going to see a dramatic slowdown you know in terms of purchases in terms of what they're looking at and so that is creating a challenge saying hey there's a weak consumer here now what do i think about the valuation where do i think the stock goes potentially from here currently around a 60 billion dollar valuation a 60 billion dollar market cap and you could see you know fiscal 18 was when they were at 30 billion dollars and they haven't been there since until estimated this year where they're supposed to beat it around 31 billion in revenue is what's expected and then penciling out somewhere i'm penciling out somewhere between let's say 25 and 30 percent profit margins for them long term thinking about what do they look like over the full market cycle currently they're they're north of that you know but now they're guiding to something that's in the 20s percentage so i'm saying long term let's think about this over several years their guidance has been around 30 so i'm putting 25 to 30 percent for the margins slapping on a 10 tax rate then the question is well what's the revenue growth rate in the years ahead yeah they do have a very high expectation for their bid demand well how does that actually translate into revenue when you see a lot of deflation in terms of their underlying products because it's effectively commodity products with declining prices over time how does that actually translate into revenue and you can see you know for two years 2019 2020 you saw some substantial declines now part of that was due to cobit clearly um but the question is so where does this sort of shake out in the years ahead are they able to grow much faster than let's say seven and a half percent and that's that's really you know if you're a micron bull you have to say i have confidence that their revenue is going to be let's say double digits in the years ahead and that's really what's going to drive it and i think there's going to be you know really a much higher multiple i'm assuming a lower multiple here partly because investors aren't actually seeing most of that free cash flow most of that quote-unquote earnings that they report their their free cash flow is quite different than their earnings and i talked about that earlier now keep in mind this is a hypothetical valuation framework of course stock prices go way higher way lower a lot depends on their execution broader sentiment but i'm assuming a low multiple range because that cash doesn't actually end up in shareholder pockets most of the time because it goes back into hey we gotta go back into expansion and also you know this company given that they are a price taker effectively commodity operator you're not really looking at a company that should warrant ought to argue something like a 20 times earnings multiple so i'm assuming a more conservative earnings multiple you know the way to get an attractive return from here really would require margins to go back to where they were around 30 so recover from their from their outlook for this next quarter assume some earnings multiple expansion around 12 times earnings you know assume some high single digit growth and if you're able to get these three components thirty percent margins seven and a half percent growth rate and let's say a twelve and a half times earnings multiple then you're looking at a hundred fifty percent upside from here personally i would rather try to find an unrivaled company type of company with pricing power over time where i'm much more confident that they're going to be growing at an attractive clip for years to come versus being in this sort of price taker position um you know that's that's a much much tougher position to be in unless there's a position like if i'm going to look at a commodity i'd want to make sure that there's sort of a structural shortage so that way there's going to be high prices as far as the eye can see and that they'll you know they'll just be minting free cash flow but when i see this sort of environment where they quickly have to change and say yeah the consumer weakness because of inflation is causing us to say our margins are going to get hit you know that is a bit of concern so i would want before i would personally buy i would want to see a lot more upside you know with micron stock that said i could understand why some value investors do like it you know saying hey i'm effectively looking at this saying yeah based on a range of different scenarios i'm assuming either break even to 150 to 150 percent upside you know based on this range of scenarios where one assumes effectively very little growth from here you know structurally lower margins around 25 percent versus the over 30 percent that they've seen the last few quarters and an eight times multiple that's a i'd say that's a fairly you know conservative assumption let's say five years out now the stock price will be super volatile but i think from a cover your butt perspective there is this possibility that you're looking at a break-even situation which for a lot of investors that's what you want to cover yourself with you want to say hey on the downside i'm not going to lose too much long-term if i if i think these these scenarios are achievable and so i understand why some value investors would get excited about personally i want a little bit more growth i want a little more upside for my own personal investment journey if you enjoyed this video please make a point of hitting that thumbs up hit that subscribe button thanks so much for tuning in to unrivaled investing
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