It's been a mediocre week for Micron Technology, Inc. (NASDAQ:MU) shareholders, with the stock dropping 12% to US$90.12 in the week since its latest quarterly results. Micron Technology reported US$8.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.67 beat expectations, being 6.9% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Micron Technology's 31 analysts is for revenues of US$35.0b in 2025. This reflects a substantial 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 76% to US$6.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$38.1b and earnings per share (EPS) of US$7.89 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.1% to US$133. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Micron Technology at US$250 per share, while the most bearish prices it at US$70.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Micron Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 28% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.03% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 19% annually. Not only are Micron Technology's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Micron Technology. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Micron Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Micron Technology analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Micron Technology has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.