저자: ParkevTatevosian,CFA · 외국인
요약 보기
마이크론 주가가 5거래일간 14% 하락. 발표자는 5월 8일 '최상위 추천'에서 '매수'로 하향. 포워드 PE 7배로 싸 보이나 DCF 적정가 약 705달러 대비 시장가 800달러 이상이라 고평가 판단. AI 고객 집중으로 사이클 변동성은 완화될 것으로 봄. 14% 하락에도 최상위 복귀는 아니나 장기 투자자에게 매력적이라며 매수 의견 재확인.
다듬은 글
Micron stock is down 14.3% over the previous five trading sessions. Of course, I warned investors that Micron's valuation was getting a little bit stretched, and I downgraded Micron stock. Remember, I was extremely bullish on Micron stock. I ranked it as one of the best stocks you can buy this year.
But, on May 9th, I downgraded the stock, and I said the valuation was getting stretched, and it no longer looked like one of the most attractive stocks to buy. But, what do I think about it now after the 14% decline? Let's talk about that in this video. , to be more precise, I actually downgraded Micron stock on May 8th, and I rated it still a buy, but it's no longer one of my top 15 stocks to buy, which it was previously ranked in that category.
On May 8th, I downgraded it to just a regular buy, not one of the most exciting stocks or most undervalued stocks you could buy right now. And you can see the price action here for Micron stock over the previous 5 days. It's down by over 14%. So, it seems like the downgrade was reasonable from my perspective.
The valuation was getting stretched, not if you measure on a forward price-to-earnings basis. Cuz if you look at it on a forward price-to-earnings, Micron is trading at a forward PE of just seven. That actually looks cheap, right? And it's at the lower end of where it's traded for January of 2024. But, you know, Micron has historically always traded at a relative discount to the S&P 500 because it's a cyclical business with ups and downs during the cycle.
and so right now is one of its peak moments. And so if you're evaluating the company on a forward price to earnings ratio, and its earnings expectations over the next 12 months are at their absolute highest that they will be in a decade, then you're miscalculating its actual prospects over a 10-year period.
Because over a 10-year period, its earnings per share won't be at these peak levels throughout the entire decade. They will be cyclical. They will have moments where they drop considerably. And so you don't want to value it just based on looking at the forward price to earnings ratio when the earnings per share estimate over the next 12 months are at absolute peak levels, which they are for Micron.
Business is absolutely booming. Demand outpaces supply, even though they're increasing supply, they still don't have enough supply. They're pretty much sold out for this year, and almost sold out for next year, and they're getting pricing for their products that are about 50% more than they were expecting just 3 months ago.
So prices for their product are also soaring. Everything is working in the right direction for Micron right now, which is not a sustainable situation for investors to expect the company to continue this way for the foreseeable future. The industry will adjust to these dynamics to eliminate them. So when measuring on the forward price to earnings ratio, the stock still looked cheap.
But what identified me, what showed me that Micron stock was overvalued and led to the downgrade, was my estimation using my discounted cash flow model, which highlighted the intrinsic value per share to be worth around $705, and the market price was surpassing $800. And so, I, you know, didn't see that as an attractive opportunity to put something on my list of top stocks to buy when the valuation was at or above my intrinsic value per share, and the situation was worsening, meaning the market price was increasing faster than the intrinsic value was increasing faster than the expectations for profits and cash flow were increasing.
So, that's why I downgraded it, but remember, I didn't downgrade to a sell or anything like that. I downgraded it to a buy because I feel the company's prospects over a longer-term period are still really strong. And the cyclicality I talked about earlier with the profits and sales going up and down over a cycle, I think are lowered given the changing dynamics of how the AI industry works.
In that, there are relatively few customers, four or five customers that are making the bulk of the purchases of these data centers optimized for artificial intelligence. And given that there are fewer customers, companies like Micron can better understand demand dynamics over an extended period, not just over the next 3 months or 6 months or 9 months or 12 months, but they can understand what those customers need for the next few years, and they can plan supply accordingly to meet the needs of those customers.
And that's true for all of the suppliers in the industry, right? For Nvidia, AMD, Intel, Taiwan Semiconductor Manufacturing, ASML, Broadcom, Qualcomm, uh Arm Holdings, et cetera. All of these companies can have conversations with, you know, Alphabet, Amazon, OpenAI, Oracle, Meta, Microsoft, and understand what are their needs going to be for the next few years and therefore plan their supply according to those needs.
And those big customers have better longer-term planning, better longer-term demand, and so they can give those forecasts better than if you were selling into a fragmented industry with several different smaller customers who don't have that much visibility into their future prospects, so they can't tell you very much about the what their demand will be because they don't clearly understand what their needs will be a few years from now.
So, that's the difference in the AI cycle compared to previous generations of the semiconductor cycle. It's still going to be cyclical, to be sure, but the fluctuations of that cyclicality, I think, will be lower. So, you'll have lower highs and you'll have lower lows because you have relatively fewer customers who understand their needs better than previous cycles where you had a more fragmented demand cycle driven by more companies with smaller purchase requirements, with less visibility into their future prospects.
So, with the 14% decline, I am not upgrading Micron back to my list of top stocks to buy. I don't think it I don't think the valuation has fallen enough for that, but I am reiterating my buy rating for Micron. I think it's an attractive investment opportunity for long-term investors at these market prices.
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