Micron through-cycle FCF yield valuation

Micron Technology Inc (MU)
By@grokius
Assumptions as of 2026-08-25
USD
Updated Aug 25, 2026 · Revised 1 time
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Micron through-cycle FCF yield valuation

Through-cycle unlevered FCF yield for Micron. Peak FY2026 run-rate earnings and Q4 $50B / 86% GM guidance are treated as shortage prints, not the capitalized cash earnings. Normalized FCF sits between prior-cycle peak FCF of $8.5B (FY2018) and annualized Q3 adjusted FCF of ~$73B, reflecting HBM mix and SCA floor margins well above historical peaks, after mid-cycle net capex. Net cash is added to enterprise value; SCA customer deposits are financing cash and are not counted as free cash flow.

as of 2026-08-25

Fair value per share
$1026.05
Through-cycle unlevered FCF
52,000
NTM FCF
65,000
NTM EBITDA
145,000
Implied equity value
1,179,956
Implied share price
$1026.05
Upside vs current price
9.0%
Current EV to NTM EBITDA
7.30
Implied EV to NTM EBITDA
7.97
Through-cycle FCF yield at market EV
4.9%

Capital structure

1,150millions
-24,400USD millions

Earnings power

52,000USD millions
40,000USD millions
105,000USD millions
145,000USD millions

Market

941.25USD
Latest MU quote · updated Aug 26, 2026 11:29 AM MDT

Valuation

4.5%

FCF bridge ($M)

FY2024FY2025FY2026E
Reported or through-cycle FCF52,00052,00052,000

Sources

  1. Fiscal Q3 2026 (ended 28 May 2026) revenue $41.456B, GAAP net income $28.243B or $24.67 diluted EPS, non-GAAP diluted EPS $25.11, non-GAAP gross margin 84.9%, operating cash flow $25.39B, adjusted free cash flow $18.3B. Q4 FY2026 guide: revenue $50.0B ± $1.0B, GM ~86%, non-GAAP EPS $31.00 ± $1.00 on ~1.15B diluted shares, non-GAAP opex ~$1.65B. — sec.gov
  2. Q3 FY2026 Form 10-Q: 1,129 million common shares outstanding at 28 May 2026; cash $24.995B, short-term investments $1.027B, long-term marketable investments $4.106B; current debt $0.582B and long-term debt $5.140B; nine-month CFO $45.702B and PPE purchases $19.602B; Q3 diluted weighted-average shares 1,145 million. — sec.gov
  3. Q3 call: 16 take-or-pay SCAs; 14 of 16 have ~$100B cumulative minimum-price RPO through 2030; ~20% of DRAM and ~one-third of NAND volume so far; cash deposits and commitments $22B (~$18B cash, ~$10B expected in Q4, financing cash flow not FCF); Q4 capex ~$10B and FY2026 net capex ~$27B; FY2027 quarterly capex above Q4 with more than half the YoY increase from construction; tight DRAM/NAND expected beyond calendar 2027; HBM4 12-high already >$1B revenue; data center revenue >$25B in Q3. — transcripts.platformaeronaut.com
  4. 10 August 2026 KeyBanc Technology Leadership Forum: CBO Sumit Sadana said customer demand signals rose further since earnings, calendar 2027 is now expected tighter than 2026, data-center customers often get less than half the DRAM they want, U.S. investment plan raised from $200B to $250B, and more SCAs have been signed since the Q3 call. — stockanalysis.com
  5. XBRL annual free cash flow: FY2018 $8.521B (prior-cycle peak), FY2023 $(6.117)B, FY2024 $0.121B, FY2025 $1.668B. TTM FCF through Q3 FY2026 $26.172B; TTM EBITDA $68.254B; TTM revenue $90.274B; Q3 EBITDA $35.682B. — sec.gov
  6. Street still capitalizes the boom: FY2026 revenue ~$129.7B and EPS ~$73.40; FY2027 revenue ~$240B and EPS ~$155; S&P Global average 12-month target $1,515 (47 analysts, Strong Buy). That is a peak-earnings multiple, not a through-cycle FCF yield. — stockanalysis.com
  7. Independent August 2026 writeups frame MU at ~6x FY2027 earnings because the market will not capitalize $25-$31 quarterly EPS as a permanent run rate, even with SCA floors. Citi cut its target to $1,150 on 10 August 2026; Mizuho reiterated $1,300 on 25 August 2026. — 247wallst.com
  8. Live MU quote $932.97 at the 25 August 2026 close (Yahoo/Nasdaq); market cap about $1.05T. — finance.yahoo.com

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