Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 348.67

+0.2%

Jan 22 4:00 PM EST

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To: Sam who wrote (77034)	9/14/2017 8:44:13 PM
From: Elroy	Read Replies (1) of 95757

It would be nice to see a PE of just, say, 6 or 7 on that $7.80 earnings number. I'm not sure MU should be valued on earnings like a normal tech stock. Semi stocks trade between 12x and 22x depending on the growth characteristics and defensibility of the product area. But semi stocks don't have massive capital spending requirements. Over time, earnings should match pretty well with free cash flow. MU has great earnings now, but also has massive capital spending requirements each year (whether business is good or bad) in order to keep up with technological developments in the semi manufacturing space. Any idea what is MU's enterprise value to EBITDA? That's a normal metric for telecom companies, a space that also have continual massive capital spending requirements. And telcos have defensible stable predictable revenues/earnings, they don't float all over the map like Micron. How about MU's free cash flow per year forecast over the next 1-3 years, what's that? You could look at enterprise value to free cash flow to get an idea of the valuation - although even then it's hard to say what would be a "fair" multiple, 12x? 15X? 9x?

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