Micron Is Trading at About 7 Times Next Year's Earnings Estimate Even After Crossing $1 Trillion in Market Cap. Here's Why That Multiple Looks Nothing Like Nvidia's.
The memory-chip maker's stock is heavily discounted, but one catalyst could lead the market to rerate it at a higher multiple.
Overview
Shares of Micron Technology (NASDAQ: MU) have soared over the past year as memory shortages fueled explosive growth in revenue and profits. With the stock up by more than 700%, the company's market cap recently crossed $1 trillion, yet the stock still trades at a cheap-looking valuation of about 7 times next year's consensus earnings estimate.
That valuation sits well below Nvidia's roughly 18 forward price-to-earnings (P/E) multiple. So why the discount on Micron -- and is it warranted?
Image source: The Motley Fool.
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Originally published at www.fool.com.
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