Filing Flows › Companies › Micron Technology › Analysis traps
Micron Technology (MU): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q4 FY26, to Sep 3, 2026, filed Oct 9, 2026; rules v1.1
Micron Technology (MU): 1 rule of 10 triggered on the filings to Sep 3, 2026: low P/E at a cyclical peak = undervalued. 1 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Low P/E at a cyclical peak = undervalued Triggered · severity high · confidence medium
The shares trade at 8.8× this year's net income of $85.0B, but that profit is at a high: the median of the last eight fiscal years is $6.3B, on which the same market value is 119.1×. A low multiple of peak profit is not a low multiple of normal profit.
Innocent reading: The business has changed for good (a merger, a new line, a pricing regime) and the old years are not its normal.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 1,359.31 a share (price 656.39); 68% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 1,144.83 to 1,608.33; across every method the research ran the range is 9 to 5,802. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $57.3B to $59.0B; working capital and lower capex explain 0% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $17.5B |
| Operating cash flow | $89.7B |
| Capex, year before | $15.9B |
| Capex | $30.7B |
| Free cash flow, year before | $1.7B |
| Free cash flow | $59.0B |
| Change in FCF | $57.3B |
| Change in capex | $14.9B |
| Working capital: change in its cash contribution | −$14.7B |
| Of which: capex cut | 0.00 |
| Of which: working capital released | 0.00 |
| Share of the increase that need not repeat | +0.0% |
| Operating cash flow before working capital: change | 86859000000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.0% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY26 |
| Stock compensation | $1.3B |
| Revenue | $133.2B |
| SBC / revenue | +1.0% |
| Buybacks | $650M |
| Buybacks / SBC | 0.5 |
| Diluted shares, year before | 1,125.0M shares |
| Diluted shares | 1,143.0M shares |
| Diluted shares: change | +1.6% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY26 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 344% against revenue 379% in Q4 FY26; DSO 53 against a median of 51: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q4 FY26 |
| Revenue, year over year | +379.3% |
| Receivables, year over year | +343.8% |
| Quarter before | Q3 FY26 |
| Revenue y/y, quarter before | +345.7% |
| Receivables y/y, quarter before | +389.7% |
| Days sales outstanding | 53.0 |
| DSO, median of eight quarters | 50.9 |
| Receivables | $31.8B |
| Revenue | $54.2B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q4 FY26 (receivables and revenue) · Q4 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
Nothing comes due within a year; net debt is −$40.6B.
The figures and how they are read
| Cash and investments | $43.4B |
| Debt | $2.8B |
| Net debt | −$40.6B |
| Due within a year | 0 |
| Read from | the debt maturity table |
| Free cash flow, twelve months | — |
| Cash plus free cash flow | $43.4B |
| Coverage of what is due | — |
| Due in the second year | 0 |
| Balance sheet date | 2026-09-03 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY26 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 1372% and net income rose 1398% in Q3 FY26; the share count rose 1.8%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 FY26 |
| Quarter before | Q3 FY25 |
| EPS, year before | $1.68 |
| EPS | $24.67 |
| Net income, year before | $1.9B |
| Net income | $28.2B |
| Diluted shares, year before | 1,125.0M shares |
| Diluted shares | 1,145.0M shares |
| EPS growth | +1371.7% |
| Net income growth | +1398.3% |
| Diluted shares: change | +1.8% |
| eps from profit | $23.43 |
| eps from share count | -$0.44 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 FY26 (net income, diluted shares, EPS) · Q3 FY25 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Triggered severity high · confidence medium
The shares trade at 8.8× this year's net income of $85.0B, but that profit is at a high: the median of the last eight fiscal years is $6.3B, on which the same market value is 119.1×. A low multiple of peak profit is not a low multiple of normal profit.
The figures and how they are read
| market value | $751.6B |
| net income ttm | $85.0B |
| pe ttm | 8.80 |
| net income median fy | $6.3B |
| pe mid cycle | 119.10 |
| net income peak fy | $85.0B |
| years | FY19 / 6313.0; FY20 / 2687.0; FY21 / 5861.0; FY22 / 8687.0; FY23 / -5833.0; FY24 / 778.0; FY25 / 8539.0; FY26 / 84969.0 |
| down years in window | 2 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q4 FY26 (net income, trailing twelve months)
What would explain it innocently
- The business has changed for good (a merger, a new line, a pricing regime) and the old years are not its normal
- The market is right that profit will fall, and the price already says so
- Capacity has left the industry, so the cycle's trough is higher than before
What to look for in the filing
- Where the industry's prices and volumes stand against their own history
- Capacity on order across the industry
- Management's view of the cycle in the MD&A
What would show the trap does not apply
- Profit holds at this level through the next two years (the eight-year peak was a new base, not a top)
- The industry's capacity and prices stay where they are rather than reverting
Look again: next filing.
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 1,359.31 a share (price 656.39); 68% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 1,144.83 to 1,608.33; across every method the research ran the range is 9 to 5,802. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 1,359.31 |
| price | 656.39 |
| terminal value share | +67.9% |
| swing by input | Revenue growth (each year) / ±5 pts / 1144.83 / 1608.33; WACC / ±1 pt / 1242.38 / 1498.39; Tax rate / ±5 pts / 1274.8 / 1443.81; Operating margin / ±3 pts / 1301.4 / 1417.22 |
| range all methods | 8.76; 5802.49 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Micron Technology: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.