Micron Technology Price-to-Sales

For informational and educational purposes only • Not investment advice.

Micron Technology

Memory and storage solutions

Estimated Fair Value

$363.94

Stock price: $1029.00

Fair value below stock price

This model estimates a company's fair value by applying its historical Price-to-Sales multiple to revenue.

Historical P/S Ratios

This chart shows the company's historical Price-to-Sales ratio by year.

Key Valuation Metrics

Selected P/S Multiple

Notes

• The current Price-to-Sales (P/S) ratio is meaningfully above the company's historical P/S multiple, indicating the stock is trading at a higher valuation relative to its historical revenue.

• The historical Price-to-Sales range is wide, meaning the valuation is sensitive to which historical multiple is used.

What is Price-to-Sales (P/S) Valuation?

Price-to-Sales (P/S) Valuation estimates a company's Fair Value based on its Revenue and the P/S multiple applied to that Revenue.

The P/S ratio compares a company's Market Capitalization with its Revenue. It shows how much investors are willing to pay for each unit of Revenue generated by the company.

Historical P/S ratios show the valuation multiples at which the company has traded in the past. They can be used as a reference for estimating Fair Value from the company's Revenue.

P/S Valuation can be useful for companies with negative or volatile earnings, but it does not directly account for profitability, margins or operating efficiency.

How the P/S Model Works

The Price-to-Sales model estimates fair value by calculating the company's historical P/S multiples, selecting a valuation P/S, and applying it to current Revenue to estimate Fair Value per Share.

Historical Revenue & Share Prices

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Calculate Historical P/S

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Select Valuation P/S

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Apply to Current Revenue

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Fair Value per Share

P/S Formula

\text{P/S Ratio} = \frac{ \text{Market Capitalization} }{ \text{Revenue} }

Key Model Assumptions

• The company must have positive current Revenue.
• Current Revenue is based on trailing twelve-month (TTM) results when four consecutive quarterly periods are available; otherwise, the latest annual revenue is used.
• Historical P/S ratios are calculated only for years with valid positive Revenue and market data.
• The 10 most recent valid historical P/S ratios are used to estimate the company's typical valuation multiple.
• The historical median P/S forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median P/S.
• Historical P/S multiples may not remain representative if the company's growth, margins or profitability change materially.

Step 1 — Calculate Historical P/S Ratios

Historical Market Cap = Year-End Share Price × Historical Shares Outstanding

Historical P/S = Historical Market Cap / Historical Revenue

Historical Median P/S = Median of the 10 most recent valid historical P/S ratios
Historical Median P/S = 3.09x

The model calculates historical Market Capitalization and historical P/S ratios. The median of the 10 most recent valid P/S ratios is then used as Micron Technology's historical valuation benchmark. The resulting median P/S is 3.09x.

Step 2 — Select the Valuation Multiple

Selected P/S = Historical Median P/S × Scenario Adjustment (Base)

Selected P/S = 3.09x × 100% = 3.09x

The selected scenario adjusts the historical median P/S to determine the valuation multiple used to estimate Fair Value. Under the base scenario, the model uses a P/S multiple of 3.09x.

Step 3 — Estimate Fair Value per Share

Fair Market Cap = Revenue × Selected P/S

Fair Market Cap = $133.2B × 3.09x = $411.0B

Fair Value per Share = Fair Market Cap / Shares Outstanding

Fair Value per Share = $411.0B / 1.13B = $363.94

The selected P/S multiple is applied to Micron Technology's Revenue of $133.2B to estimate a Fair Market Capitalization of $411.0B. Dividing this value by Shares Outstanding produces an estimated Fair Value per Share of $363.94.

Step 4 — Compare With the Current Market Valuation

Current P/S = Current Market Cap / Current Revenue

Current P/S = $1162.1B / $133.2B = 8.73x

Valuation Gap = Fair Value per Share / Current Price − 1

Valuation Gap = $363.94 / $1029.00 − 1 = -64.6%

Current P/S shows the multiple currently assigned to Micron Technology's Revenue. The stock currently trades at 8.73x compared with a historical median of 3.09x.

The Valuation Gap compares the estimated Fair Value with the current stock price of $1029.00. Under the current assumptions, the Valuation Gap is -64.6%.