It has been about a month since the last earnings report for Micron (MU). Shares have added about 22.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Micron due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Micron Technology, Inc. before we dive into how investors and analysts have reacted as of late.
Micron Q4 Earnings and Revenues Beat Estimates
Micron reported fourth-quarter fiscal 2025 earnings of $3.03 per share, beating the Zacks Consensus Estimate by 5.9%. The company’s fourth-quarter earnings jumped 156.8% year over year from the year-ago quarter’s earnings of $1.18 per share.
Micron’s revenues increased 46% year over year to $11.32 billion and beat the Zacks Consensus Estimate by 1.2%. The top line was driven by robust demand for its high bandwidth memory (HBM) products.
Micron Q4 Top-Line Details
Technology-wise, DRAM revenues of $8.98 billion, accounting for 79.4% of the total revenues in the fiscal fourth quarter, increased 68.7% year over year and 27% sequentially. The company experienced record demand for data center DRAM, driven by strong growth in HBM and robust performance of high-capacity DIMMs and low-power server DRAM products.
NAND revenues of $2.3 billion, representing 19.9% of the total revenues, were down 4.8% year over year but increased 5% quarter over quarter.
Other revenues were $79 million in the reported quarter, which increased from $59 million in the year-ago quarter and was up from $75 million in the previous quarter.
Previously, Micron used to report its business segments as follows: Compute and Networking Business Unit, Mobile Business Unit, Embedded Business Unit and Storage Business Unit.
Following the reorganization, its disclosure of business segments is as follows: Cloud Memory Business Unit, Core Data Business Unit, Mobile and Client Business Unit and Auto and Embedded Business Unit.
Business segment-wise, revenues of $4.54 billion from the Cloud Memory Business Unit soared 214% from the year-ago quarter and 34% sequentially, driven by a record increase in HBM revenues.
Revenues of $1.57 billion from the Core Data Business Unit declined 23% on a year-over-year basis but increased 3% on a quarter-over-quarter basis due to higher pricing and a favorable mix.
The Mobile and Client Business Unit’s revenues were $3.76 billion, up 25% from the year-ago period and up 16% from the previous quarter. Revenues from the Auto and Embedded Business Unit totaled $1.43 billion, which increased 17% year over year and 27% sequentially.
Micron’s Q4 Operating Details
For the fiscal fourth quarter, MU posted a non-GAAP gross profit of $5.17 billion, representing a robust improvement from the year-ago quarter’s $2.83 billion. Also, Micron’s non-GAAP gross profit increased 42.7% sequentially.
The fiscal fourth-quarter non-GAAP gross margin of 45.7% improved from the year-ago quarter’s 36.5%. The non-GAAP gross margin increased 670 basis points from the previous quarter’s 39%.
Non-GAAP operating expenses were $1.214 billion compared with the previous quarter’s $1.133 billion and the year-ago quarter’s $1.081 billion.
Micron’s non-GAAP operating income of $3.955 billion was higher than the previous quarter’s non-GAAP operating income of $2.490 billion. It also shows significant improvements from the year-ago quarter’s non-GAAP operating income of $1.745 billion.
The non-GAAP operating margin came in at 35%. Micron posted a non-GAAP operating margin of 26.8% for the previous quarter, and it had a non-GAAP operating margin of 22.5% in the year-ago quarter.
Micron’s Balance Sheet & Cash Flow
MU exited the reported quarter with cash and investments of $11.9 billion compared with $10.81 billion at the end of the prior quarter. Its total debt, as of Aug. 28, 2025, was $14.02 billion compared with the $15 billion witnessed at the end of the previous quarter.
The company generated an operating cash flow of $5.73 billion in the fiscal fourth quarter. It spent $4.93 billion on capital expenditure in the quarter, resulting in an adjusted free cash flow of $803 million. MU paid out $522 million in dividends but repurchased no shares in the fourth quarter of fiscal 2025.
Micron’s Q1 Outlook
Micron provided its guidance for the first quarter of fiscal 2026. The company anticipates revenues of $12.5 billion (+/-$300 million) in the fiscal first quarter. For the fiscal first quarter, MU projects a non-GAAP gross margin of 51.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.34 billion (+/-$20 million). Adjusted EPS is anticipated to be $3.75 (+/- 15 cents).
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 21.21% due to these changes.
VGM Scores
Currently, Micron has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Micron has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
