Micron Technology cycle-adjusted earnings valuation

Micron Technology Inc (MU)
By@hypertonx
Assumptions as of 2026-10-02
USD
Updated Oct 2, 2026 · Revised 4 times
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Micron Technology cycle-adjusted earnings valuation

Cycle-adjusted P/E valuation for Micron Technology aligned to the portfolio maintenance instructions. The model values normalized annual earnings rather than the unusually strong FY2026 run rate. Revenue, gross margin, operating expense, tax, and dilution are explicit so the AI/HBM structural-margin thesis can be tested directly. The base normalized gross margin is deliberately below fiscal Q3 actual and fiscal Q4 guidance. Net cash is shown as a balance-sheet diagnostic but is not added again to fair value because P/E is an equity-value multiple.

as of 2026-10-02

Fair value
$1,065.53
Upside/downside
-2.1%
Normalized EPS
$62.68
Normalized net income
$72.1
Implied equity value
$1,225.4
Net cash per share
$59.37

Balance sheet

68.27$B

Capitalization

1.15B shares

Market

1,088.00USD/share
Latest MU quote · updated Oct 7, 2026 2:00 PM MDT

Normalized earnings

58.0%
8.00$B
160.00$B
15.0%

Valuation

17.00x

Fair value vs normalized P/E and gross margin

Target normalized P/E38.0%48.0%58.0%68.0%75.0%
12.00 x$468$610$752$894$993
14.00 x$546$712$877$1,043$1,159
17.00 x$663$864$1,066$1,267$1,407
20.00 x$781$1,017$1,254$1,490$1,656
22.00 x$859$1,119$1,379$1,639$1,821

Sources

  1. October 2 Model Edge reference MU quote $1074.89, refreshed 2026-10-02T17:10:06.003454-06:00. Price alone is not evidence to change operating forecasts; BRUN separately refreshes the existing peer-relative valuation. (accessed 2026-10-02)
  2. September 30 post-earnings call read: over 75% of FY2027 shipments committed, SCAs cover about 35% of bit volume through 2030, about three-quarters of SCA revenue has a defined pricing framework and one-quarter periodic negotiation; most defined frameworks use floors/ceilings. These are not 35% of revenue or guaranteed peak pricing. FY2027 R&D rises over $1B excluding incentive effects; construction increases principally target late-2028 and later cleanrooms, with equipment installed as demand warrants. Retain $160B normalized revenue, 58% margin, $8B opex, 17x P/E and $68.274B net-cash diagnostic; capex above $50B remains flagged. Ambiguous automated transcript wording on bit/cost growth is not used quantitatively. — modeledge.ai (accessed 2026-10-02)
  3. September 30 Modeledge reference MU price $1065.11, refreshed 2026-09-30T15:27:35.606757-06:00. This quote refresh changes market-relative outputs; any intrinsic effects are separately explained. For USAU only, the existing financing-price formula mechanically links valuation to price. (accessed 2026-09-30)
  4. September 30 Q4/FY2026 review: Q4 revenue $54.229B, adjusted gross margin 87%, adjusted EPS $33.42 and FCF $33.199B; Q1 outlook $61.5B +/-$1.5B revenue and $38.15 +/-$1 EPS. Keep normalized revenue $160B, gross margin 58%, opex $8B, tax 15%, P/E 17 and 1.15B diluted shares: peak run rates are not mid-cycle forecasts. Net-cash diagnostic updates $24.4B to $68.274B using cash $38.364B, short investments $5.070B, long investments $30.019B less $5.179B debt, excluding restricted cash. This includes customer funding and is not added to equity value. $150B remaining SCA performance obligations and 26 agreements support demand but are not free cash or unconditional company-wide future pricing. FY2027 first-half capex about $25B with a higher second half implies over $50B, crossing the user's $40B flag; opex expected to rise about $2.5B from FY2026. Retain intrinsic value pending evidence on sustainable mid-cycle costs and returns. — sec.gov (accessed 2026-09-30)
  5. Additional supporting source for the September 30 MU review; see the first dated source note. — modeledge.ai (accessed 2026-09-30)
  6. September 14 company-specific filing/press discovery and market-news checks did not establish a new operating forecast or capital-structure change. Preserve the existing intrinsic assumptions; continue the model's unresolved refresh checklist. (accessed 2026-09-14)
  7. September 14 Modeledge reference MU share price $924.03 retrieved after the regular U.S. close. Quote updates affect market-relative outputs; forecast changes, if any, are separately identified. (accessed 2026-09-14)
  8. Fiscal Q3 2026 revenue was $41.456B, non-GAAP gross margin was 84.9%, non-GAAP diluted EPS was $25.11, operating cash flow was $25.39B, and adjusted free cash flow was $18.3B. — investors.micron.com (accessed 2026-08-05)
  9. Fiscal Q4 2026 guidance called for $50.0B plus or minus $1.0B of revenue, approximately 86% non-GAAP gross margin, $31.00 plus or minus $1.00 of non-GAAP EPS, and approximately 1.15B diluted shares. — investors.micron.com (accessed 2026-08-05)
  10. At fiscal Q3 end Micron reported $30.2B of cash and investments, $5.7B of debt, and $24.4B of net cash; management also described 16 strategic customer agreements and approximately $27B of FY2026 net capital spending. — investors.micron.com (accessed 2026-08-05)
  11. The fiscal Q3 Form 10-Q reported 1,129,393,151 common shares outstanding as of June 17, 2026 and a $5.72B debt carrying value at May 28, 2026. — sec.gov (accessed 2026-08-05)
  12. MU market price was $918.87 at the 2026-08-05 retrieval timestamp. — nasdaq.com (accessed 2026-08-05)

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