Seeking Alpha

Micron joins tech selloff post-earnings; SanDisk outperforms

  • Positive Street commentary and a solid FQ2 beat haven't been enough to keep Micron (MU -2.6%) from joining a major tech selloff. SanDisk (SNDK +0.3%), on the other hand, is staying positive, as investors take heart in an 11% Q/Q increase for Micron's trade NAND flash sales (bit volume +35%, ASP -18%).
  • "Memory continues to be in the early stages of a structural re-rating driven by slowing supply growth and improving demand mix," writes Credit Suisse, reiterating an Outperform and $30 PT. The firm notes server DRAM sales rose 70% Y/Y and expects enterprise memory demand to more than double due to strong demand for (DRAM-intensive) analytics applications.
  • The firm does note Micron's gross margin fell short of its estimates, and wants "a more clear roadmap for NAND GM improvement." Micron's current NAND GM (in the high-20s range) trails an industry average of 40%-45%. Nonetheless, CS forecasts $5 in sustained EPS down the road.
  • Sterne Agee (Buy, $30 PT) likes Micron's FQ3 guidance for moderate DRAM and NAND ASP declines even though Hynix's fire-damaged Wuxi, China fab is now fully online. It sees mobile DRAM and SSD demand driving upside.
  • Shares are still up over 4x from their fall 2012 lows.
  • CC transcript

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Comments (2)
  • joeg1969
    , contributor
    Comments (435) | Send Message
     
    Best Chance to load up!
    7 Apr 2014, 08:23 AM Reply Like
  • Exercisestellarhealth
    , contributor
    Comments (382) | Send Message
     
    True added to my current position in mid teens on the large dip after earnings for profit taking, options ect... See as a compelling value and growth investment, and likely decent/strong Q3 after four consecutive good Q's, the latest being this Q2. With increasing revenue as a long-term shareholder, have written requesting a dividend in the coming future.
    7 Apr 2014, 10:14 AM Reply Like
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