Know Beyond Why Micron Technology, Inc. (MU) is a Trending Stock

epinoy

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Zacks Equity Research
Thu, January 12, 2023 at 10:00 PM GMT+8


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MU
-0.59%






Micron (MU) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this chipmaker have returned +6.4%, compared to the Zacks S&P 500 composite's +1% change. During this period, the Zacks Semiconductor Memory industry, which Micron falls in, has gained 6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Micron is expected to post a loss of $0.63 per share for the current quarter, representing a year-over-year change of -129.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -93.2%.

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