Micron reached a 52-week low on a weak forecast. Is there still time to buy the dip?
vzphotos/iStock Editorial via Getty Images


A weak forecast sent Micron (NASDAQ:MU) spiraling earlier this month, with the maker of computer memory and data storage equipment falling to a new 52-week low. Softening demand forced the company to rethink its near-term assumptions, sparking a general slide in the sector.
However, since that point, the stock has bounced off its low and the company continues to point to longer-term secular demand for memory and storage. Is it time to buy MU in anticipation of a long-term recovery?
Warning and Recovery
On June 30, Micron Technology (MU) released a mixed Q3 report. The firm beat expectations with its bottom line but came up shy on its revenues.
Meanwhile, investors focused on the firm's forecast, which dramatically undercut the amounts experts had predicted. MU forecast Q4 revenue between $6.8B and $7.6B. Analysts were looking for a figure above $9B. 
On the profit side, MU predicted quarterly EPS between $1.43 and $1.83. That range came in well below the $2.62 consensus of the Wall Street community.
Shares dropped in the immediate aftermath of the earnings report, sliding to an intraday 52-week low of $51.44. This marked a decline of about 48% from a 52-week high of $98.45 seen early in the year.
Signs of sagging demand also put immediate pressure on the broad sector. Stocks like Dell (DELL), HP (HPQ), Nvidia (NVDA), AMD (AMD) and Intel (INTC) all retreated following the MU report.
However, while the knee-jerk reaction to the forecast sent the stock spiraling to a new low, buyers quickly stepped in. The day after the earnings report, the stock touched a 52-week low of $51.44 -- but still finished the day at $53.65. Shares lost 3% on the day as a whole but only after surging 4% from their intraday nadir.
Meanwhile, the recovery carried over into the following session, when the stock jumped almost 6%, with another set of gains booked on the subsequent day. With the stock higher again in Thursday's intraday trading, rising to $58.86, MU has now rebounded by 14% since its post-earnings low.
Is MU a Buy?
Given the quick snapback from the disappointing forecast, does MU have further to run in the near term?
Wall Street remains upbeat on the stock. Of the 35 analysts surveyed by Seeking Alpha, 23 have given MU a Strong Buy rating. Another six have issued a Buy opinion -- meaning more than 80% maintain a bullish recommendation.
Among the rest, five analysts have given the stock a Hold rating. MU has also garnered a single Sell opinion.
The average price target sits at about $81, a 38% rally from current levels. However, that number has come down significantly in recent months, amid a wave of recalibrations after the earnings report.
Quantitative figures show a more cautious view. Seeking Alpha's Quant Ratings give MU high marks for profitability, valuation and growth. However, the stock receives a C+ for momentum and a D for revisions.

For more on Micron (MU), see a deep dive by Seeking Alpha contributor Bill Zettler, who does a head-to-head comparison with AMD. Looking at another potential investment, fellow SA contributor Jonathan Weber weighs Marvell Technology (MRVL) versus MU.