Micron Technology, Inc. Net Income dropped on 57.4% and EBITDA Margin dropped on 14.3 pp from 54.7% to 40.4%
09/29/2020 • About Micron Technology, Inc. (
$MU) • By InTwits
Micron Technology, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Micron Technology, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 35.9%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $0m in FY2017, $1m in FY2016
- The company has potentially unprofitable business model: ROIC is 6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 8.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.3 pp from 54.7% to 40.4% in FY2020. During the last 5 years EBITDA Margin topped in FY2018 at 65.0% and was declining since that time.
Gross Margin dropped on 15.2 pp from 45.7% to 30.6% in FY2020. During FY2016-FY2020 Gross Margin topped in FY2018 at 58.9% and was declining since that time. SG&A as a % of Revenue increased slightly on 0.54 pp from 3.6% to 4.1% in FY2020. During the last 5 years SG&A as a % of Revenue bottomed in FY2018 at 2.7% and was growing since that time.
Net Income margin dropped on 14.4 pp from 27.0% to 12.5% in FY2020. During the last 5 years Net Income margin topped in FY2018 at 46.5% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 38.4% in FY2020. CAPEX/Revenue jumped on 15.1 pp from 23.3% in FY2017 to 38.4% in FY2020. For the last three years the average CAPEX/Revenue was 36.5%. Battling declining revenue Micron Technology, Inc. invested a large share of EBITDA (95.0%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (6.8%) and ROE (7.2%). ROIC dropped on 11.7 pp from 18.5% to 6.8% in FY2020. ROE dropped on 11.3 pp from 18.5% to 7.2% in FY2020. During FY2016-FY2020 ROIC topped in FY2018 at 42.9% and was declining since that time. During the last 5 years ROE topped in FY2018 at 55.5% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.1x and Debt / EBITDA is 0.8x. Debt jumped on 22.6% while cash increased on 6.6%.
Micron Technology, Inc. has no short term refinancing risk: cash is higher than short term debt (2,823.7%).
Valuation and dividends
The company's trades at EV/EBITDA 6.5x and P/E 20.9x.
Management team
Sanjay Mehrotra is a the company's CEO. Sanjay Mehrotra has spent 3 years with the company. The company's CFO David A Zinsner has spent 3 years with the company.
Financial and operational results
Micron Technology, Inc. ($MU) key annual financial indicatorsmln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
---|
P&L
|
---|
Revenue | 12,399 | 20,322 | 30,391 | 23,406 | 21,435 | -8.4% |
Gross Profit | 2,505 | 8,436 | 17,891 | 10,702 | 6,552 | -38.8% |
SG&A | 659 | 743 | 813 | 836 | 881 | 5.4% |
EBITDA | 3,148 | 9,729 | 19,753 | 12,800 | 8,653 | -32.4% |
EBIT | 168 | 5,868 | 14,994 | | | |
Interest expence | 437 | 601 | 342 | | | |
Tax | 19 | 114 | 168 | | | |
Net Income | -276 | 5,089 | 14,135 | 6,313 | 2,687 | -57.4% |
Stock Based Compensation | 191 | 215 | 198 | | | |
Balance Sheet
|
---|
Cash | 4,140 | 5,109 | 6,506 | 7,152 | 7,624 | 6.6% |
Inventory | 2,889 | 3,123 | 3,595 | | | |
Short Term Debt | 756 | 1,262 | 859 | 1,310 | 270 | -79.4% |
Long Term Debt | 9,154 | 9,872 | 3,777 | 4,541 | 6,906 | 52.1% |
Cash flow
|
---|
Capex | 5,817 | 4,734 | 8,879 | 9,780 | 8,223 | -15.9% |
Acquisitions | | 2,634 | | | | |
Ratios
|
---|
Revenue growth | -23.4% | 63.9% | 49.5% | -23.0% | -8.4% | |
EBITDA growth | -44.4% | 209.1% | 103.0% | -35.2% | -32.4% | |
|
---|
Gross Margin | 20.2% | 41.5% | 58.9% | 45.7% | 30.6% | -15.2% |
EBITDA Margin | 25.4% | 47.9% | 65.0% | 54.7% | 40.4% | -14.3% |
EBIT Margin | 1.4% | 28.9% | 49.3% | | |
SG&A, % of revenue | 5.3% | 3.7% | 2.7% | 3.6% | 4.1% | 0.5% |
SBC, % of revenue | 1.5% | 1.1% | 0.7% | | |
Net Income Margin | -2.2% | 25.0% | 46.5% | 27.0% | 12.5% | -14.4% |
CAPEX, % of revenue | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% | -3.4% |
|
---|
ROIC | 0.8% | 21.5% | 42.9% | 18.5% | 6.8% | -11.7% |
ROE | -2.3% | 33.1% | 55.5% | 18.5% | 7.2% | -11.3% |
Net Debt/EBITDA | 1.8x | 0.6x | -0.1x | -0.1x | -0.1x | 0.0x |
Interest expence / Average debt | 4.4% | 5.7% | 4.3% | | | |
People
|
---|
Insider ownership | 0.2% | 0.2% | 0.2% | | | |
Employees | 31,400 | 34,100 | 36,000 | | | |
Revenue/Employee, th. $ | 395 | 596 | 844 | | | |
Micron Technology, Inc. ($MU) key quoterly financial indicators
mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
---|
P&L
|
---|
Revenue | 5,144 | 4,797 | 5,438 | 6,056 | | - | - | - | - |
EBITDA | 1,838 | 1,829 | 2,337 | 2,724 | | - | - | - | - |
Net Income | 491 | 405 | 803 | 988 | | - | - | - | - |
Balance Sheet
|
---|
Cash | 6,969 | 7,118 | 8,267 | 7,624 | | - | - | - | - |
Short Term Debt | 462 | 287 | 384 | 270 | | - | - | - | - |
Long Term Debt | 5,699 | 5,736 | 6,896 | 6,906 | | - | - | - | - |
Ratios
|
---|
Gross Margin | 26.6% | 28.2% | 32.4% | 34.1% | | - | - | - | - |
EBITDA Margin | 35.7% | 38.1% | 43.0% | 45.0% | | - | - | - | - |
Net Income Margin | 9.5% | 8.4% | 14.8% | 16.3% | | - | - | - | - |
Peers in Semiconductors
Below you can find Micron Technology, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
|
---|
Median (43 companies) | 1.2% | 10.9% | 4.4% | -3.0% | 2.8% |
---|
Micron Technology, Inc. ($MU) | - | 63.9% | 49.5% | -23.0% | -8.4% |
Top companies by Gross margin, %
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
|
---|
Median (43 companies) | 48.0% | 49.1% | 50.2% | 50.7% | 49.4% |
---|
Micron Technology, Inc. ($MU) | 20.2% | 41.5% | 58.9% | 45.7% | 30.6% |
Top companies by EBITDA margin, %
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
|
---|
Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
---|
Micron Technology, Inc. ($MU) | 25.4% | 47.9% | 65.0% | 54.7% | 40.4% |
Top companies by CAPEX/Revenue, %
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
Rambus, Inc. ($RMBS) | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% |
|
---|
Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
---|
Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
Top companies by ROIC, %
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
|
---|
Median (45 companies) | 1.7% | 3.2% | 2.2% | 2.2% | 5.3% |
---|
Micron Technology, Inc. ($MU) | 0.8% | 21.5% | 42.9% | 18.5% | 6.8% |
Top companies by Net Debt / EBITDA
Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
---|
SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
|
---|
Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.5x |
---|
Micron Technology, Inc. ($MU) | 1.8x | 0.6x | -0.1x | -0.1x | -0.1x |