r/valueinvesting
MU reports Wednesday and a beat probably isn't enough anymore.
MU is up 280% YTD with stretched positioning; a mere earnings beat may not sustain the multiple, signaling a peaking cycle.
- Forward P/E under 10x and PEG of 0.34 appear cheap on the surface.
- YTD gain of 280% and recent 11% jump on unrelated news indicate stretched positioning rather than fundamental strength.
- Low forward P/E and PEG rely on aggressive earnings revisions, making them misleading signals of true value.
- A mere beat-and-raise may not sustain the multiple, and cautious guidance could signal a peaking upcycle, causing disproportionate downside.
MU reports Wednesday and this might be the first print in a while where a beat alone doesn't do much.
Stock's up something like 280% ytd. It jumped almost 11% in one session two weeks ago on macro news that had nothing to do with the company itself. When a stock moves that much off unrelated headlines, that's positioning getting stretched, not the thesis getting stronger.
Trailing P/E is sitting around 46x, forward is under 10x. That gap only closes if earnings step up about as much as the most aggressive analyst on the street is modeling. PEG is at 0.34 right now which on its face looks cheap, but the E in that ratio just got revised up hard along with the price this month. So part of what that number is measuring is how excited analysts already got, not some clean independent signal.
My take, for what it's worth: a beat-and-raise here probably just holds the multiple where it is. Anything less, even a decent quarter with cautious guidance, likely gets read as the upcycle topping out, and the stock gives back more than the actual miss would justify.
Wouldn't sell if I held it. Wouldn't add here either though. Would love to hear opinions.
They will report 80% yoy and endless demand that will take at least a decade to fulfill.
NVDA reported 80% YoY and their stock dropped after earnings. 🤔
I didnt say if it will go up or down. In just saying thats what they will report. But eventually, 5k
a beat is already priced in. i’m expecting a correction after, and will add a small amount more there
^ this, should be a nice entry point
It would be so hilarious if it popped up 30%.
MU will be $2k eoy
5k, you re too pessimistic
I was thinkin 8k
10 million.
Apple is literally moving up their prices because they don’t see this storm stopping anytime soon.
Youre just salty. Up up n away while adbe drops 15%
There’s a chance the beat is above even the most aggressive analyst forecasts. Guidance too. It’s strange people on reddit keep focusing on a potential mini-correction, but ignore the risk this jumps another 15%
It’s because of the crazy run it has had in the last few months that people are concerned and rightfully so. Because micron has no room for errors or misses
Higher valuations = higher expectations priced in
At some point the treadmill starts spinning too fast for even the highest quality company to exceed expectations