Micron Technology (MU) stock had an incredible 2013. The American multinational semiconductor company's stock climbed from $6.60 to $21.75 last year. Most analysts believe the bull market of 2013 will continue into 2014 with more modest gains, MU will be one of the first companies to report quarterly financial results in the new year. Micron Technology is expected to report their first earnings release of 2014 on Tuesday, January 7th after the market closes.
The current Wall Street consensus expectation is for MU to report 43c EPS and $3.710B revenue, while the current Estimize consensus from Buy Side and Independent contributing analysts is 46c EPS and $3.695B revenue.
By tapping into a wider range of contributors including hedge-fund analysts, asset managers, students, and non professional investors the Estimize community has built a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. Over the past 5 quarters, Estimize has been more accurate on EPS and revenue 3 times each.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential between the consensuses.
Over the past four months the Wall Street consensus trend for EPS has increased from 36c to 43c, while Wall Street revenue expectations have also gone up from $3.542B to $6.786B. The Estimize EPS consensus has pushed higher from 44c to 46c and the revenue consensus has increased from $3.498B to $3.695B at the end of quarter. Timeliness of estimates is correlated with accuracy and upwards analyst revisions going into an earnings release are often a bullish indicator.
The distribution of estimates published by analysts on Estimize range from 38c to 59c EPS and $3.125B to $3.894B in revenues. This quarter we're seeing a large distribution of estimates for MU. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa. In this case market expectations are divided for Micron Technologies and we could see considerable volatility depending on how they report earnings.
The analyst with the highest estimate confidence rating this quarter is anmikyoso who projects 43c EPS and $3.704B in revenue. Estimate confidence ratings are calculated through algorithms developed by our deep quantitative research, which looks at correlations between analyst track records and tendencies as they relate to future accuracy. anmikyoso is ranked 30th overall among 3,400 contributors. In this case the analyst with the top confidence rating is expecting even profit but less revenue compared to Wall Street.
This quarter the Estimize community is expecting Micron to beat Wall Street on profit but come up short on revenue. Throughout the past 8 quarters MU has failed to live up to the Wall Street profit consensus 6 times in a row, but the 2 most recent reports have both exceeded expectations. Analysts are divided in their opinions about how well Micron will report as indicated by the wide range of estimates submitted to the Estimize platform, so look for volatility after the report no matter what the results are.