Micron's stock is still dirt cheap. Some analysts say that's about to change.

By Emily Bary and Philip van Doorn

New long-term customer agreements could bring more predictability to Micron's financials, addressing a persistent investor concern about sustainability

Micron shares have a forward price-to-earnings multiple in the same vicinity and Verizon and AT&T.

Micron Technology's stock remains very well-priced despite its explosive rally this year, but some analysts think it could soon break out of the bargain bin.

Shares of Micron (MU) trade at a forward price-to-earnings multiple of 9.2x, not much higher than the 8.3x multiple they fetched at the end of 2025, according to data provided by FactSet. While Micron has seen its stock price climb 325% so far this year, the pace of growth in rolling 12-month earnings-per-share estimates has been nearly as strong, at 284%.

It may be surprising that Micron, a hot technology stock deemed by one Wall Street trader to be among the three most important in the whole world, trades at a forward price-to-earnings multiple in the same neighborhood as Verizon Communications (VZ) and AT&T (T).

That dynamic stems from the fact that investors aren't willing to put much faith in the idea that Micron's sky-high profit levels - adjusted earnings per share increased by 1,200% in the latest quarter while adjusted gross margins neared 85% - will sustain over the long run. They've been burned by the cyclical nature of the memory industry. Micron posted an annual loss as recently as fiscal 2023, when it found itself dealing with a supply glut; its annual sales declined by 49%.

Micron isn't alone in seeing a compressed stock multiple. Shares of Sandisk (SNDK) trade at 12.4 times the consensus 12-month earnings-per-share estimate among analysts polled by FactSet. That compares with a weighted forward P/E of 20.4 for the S&P 500 SPX and 25.1 for the PHLX Semiconductor Index SOX.

Shares of South Korean memory companies SK Hynix (KR:000660) and Samsung Electronics (KR:005930) trade at forward multiples of 7.1 and 6.4, respectively, while shares of Japanese memory provider Kioxia Holdings (JP:285A) trade at 9 times forward earnings. The international memory stocks sport valuation discounts relative to their U.S. peers, owing to factors including more limited investor access and analyst coverage - something SK Hynix is trying to address through a planned Nasdaq listing.

Meanwhile, shares of storage providers Western Digital (WDC) and Seagate Technology (STX) trade at loftier multiples of 37.8 and 37.2, respectively, as those businesses are viewed to be less commoditized.

With the seven stocks sorted by the companies' market capitalizations, here is a summary of current forward P/E valuations and those at the end of 2025, showing year-to-date price changes and how much the rolling 12-month consensus EPS estimates have increased.

 
Company                         Forward P/E  Forward P/E at the end of 2025  2026 price change  2026 change in rolling 12-month EPS estimate 
Micron Technology                       9.2                             8.3               325%                                          284% 
Samsung Electronics                     6.4                            10.0               183%                                          343% 
SK Hynix                                7.1                             7.1               311%                                          310% 
Kioxia Holdings                         9.0                             9.6               783%                                          845% 
Sandisk                                12.4                            13.6               884%                                          980% 
Western Digital                        37.8                            20.1               292%                                          108% 
Seagate Technology Holdings            37.2                            20.7               272%                                          107% 
                                                                                                                             Source: FactSet 

For five out of these seven stocks, forward P/E valuations have declined this year or increased only slightly, showing that this has been very much an earnings-driven rally.

Yet some analysts think Micron could be due for a valuation uplift, thanks to changing business dynamics. What's kept Micron's forward P/E low has been the concern that sky-high memory prices could crash as supply and demand balance out over time, or that the industry could see another period of oversupply. Lately, however, Micron and Sandisk have been taking steps to make their financial performance smoother and more predictable.

This is taking place through long-term customer agreements that may sacrifice extreme profit upside in the near term in exchange for a pricing floor over an extended stretch.

UBS analyst Timothy Arcuri predicts a "re-rating" for Micron shares, referring to the idea that they could come to see a higher multiple.

"We have been covering semis for nearly [30 years] so we are sympathetic to investors' skepticism around these types of agreements, but it seems to us that floor prices are set low enough (we estimate $6/GB) that it would probably take into C2029 at the earliest and more likely C2030 until enough supply could come online to drive pricing materially below these levels and make customers even consider breaking the deal," Arcrui wrote in a note to clients. And the company is getting some payments in advance, effectively amounting to a "break fee."

By his math, if half of Micron's business went back to seeing a roughly 35% margin that was the approximate average over the prior 10 calendar years, "this would imply a 'normalized' margin in the mid 50%s - considerably higher than anything MU has ever experienced before and justifying a much higher multiple of book value."

Micron shares currently trade at 19.9 times book value.

TD Cowen's Krish Sankar also foresees a "re-rating for the stock as long as pricing remains above the [calendar second-quarter] ceiling levels."

His $1,600 price target for Micron's stock is based on a sum-of-the-parts approach that melds a 20x multiple to the potential for $40 in earnings per share via the long-term agreements and a 7x multiple to the potential for $120 in earnings per share for other parts of the business.

-Emily Bary -Philip van Doorn

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06-26-26 0803ET