What if i told you that i found a company that operates in one of the hottest markets right now that has actual 40 ebitda 20 year-over-year growth in revenues and valuation-wise? It seems to be 30 20-30 underpriced versus every single competitor in its category and it's a blue chip stock, a hundred billion dollars market cap no startups, no biotechs a massive company with a lot of upside with great numbers phenomenal. Now you know in my videos, i never keep you hostage, so you don't have to wait the whole video to find out which company? That is, i value your time and if you just want to know the name of the company, it's called micron mu is the ticker and that's all you need for my video. Don't worry about it, i got you go, do your thing, but if you want to hang out with me and listen to my analysis and my five prong test about why i think this company is phenomenal. Stick around grab a coffee grab some beer and, let's get to it.

My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you. But there's one thing you need to know about me: i don't take from anybody. So thank you for staying and i got ta be honest with you. These are my absolutely favorite videos to make i love making stock due diligence.

That is because i'm a nerd. I love digging into numbers, financials business models, dcf pretty much things normal people hate, and this is my thing. However, even though i know a lot of you kept asking me for more stock business videos, i told you i'm not gon na make any unless i find a stock. I am absolutely gaga about, and today is one of those cases, so the patience was definitely worth.

The wait and if you're new to this channel, i'm going to explain to you what is the methodology of me actually vetting a company? I use a five-point test to look at every single company and, if you're an og on the channel comment below before, i explain it, let's see how many of you get it right. So we're gon na take a look at the management of the company because we're not gon na be putting our money in bozo's hands. Of course, we have to take a look at the financials to see how balanced the company is as far as liabilities assets that all that good stuff we're going to take a look at the business model of the company, see if it actually makes sense number four, Is the dcf? Let's look at how much cash flow this company can generate over the next five to six years and of course, we got ta. Take a look at the moral values of the company to see if it aligns with us - or in this case with me and of course before we get started an important disclaimer.

This is just my opinion. It might be inaccurate. It might be just plain wrong. Who knows these might be the ramblings of a madman? Nobody really knows you got ta, do your own research and find out for yourself allegedly blah blah mother, effin bla and now, let's get to it.

So, first of all, before we get started, let's take a look at what other analysts accomplished. Analysts that actually have a proven track record are saying about this company, and for that you know, i always use the pranks. The link to join the pranks is gon na. Be below in our comment section you get a 10 off if you sign up through my affiliate link versus signing up through the pranks.

If you follow my channel, you know i've been using them well before i even had an affiliate link. I absolutely love their website. So check this out, okay, so this is the page for micron. As you can see, the price right now is 86 dollars, given take a few cents, and you can see right here in the corner.

The high the average and the low prices are 90 to 165 dollars, based on an aggregate of 25 analysts that are covering the stock. If we scroll down a little bit, you'll see that all the good analysts, all the five star analysts which end right here. These are all the five star. Analysts have a positive rating apart from this 40 negative one, and this one percent negative one.

But apart from these two, the sentiment is extremely positive. If we take a look at the top analysts covering this talk, his name is john pitzer, 76 success. Rate 26.4 average return he's ranked 38 in the nation out of 7 500 analysts. So this man is not in the top one percent.

Isn't the top point? Five percent he's covering the stock, as you can see right here, mu, but the more important thing. I always try to take a look at how accurate was he about this specific stock? So you can see right here. He gave 60 ratings for the stock 40, out of which were profitable. He has a 67 accuracy for this stock and a total average profit of 45.7 percent.

So john knows what he's talking about and john has a target price of 110, giving it a nice 28.29 upside. Now, i'm gon na tell you right now i have a little bit of a higher upside. As you know, i don't hide my conclusions in my videos. I have about 120 dollars, but i'm gon na show you my pathway to those 120, but there's really not a lot of difference between what i think and what john thinks so just stick tight and see what i have to say now before we move on just Relax, this is gon na, be a little bit fast, so i need you to concentrate, so that means no clicking.

Nothing, no smashing. Nothing! No subscribing no buying. Nothing just try to stay with me, because the pace is gon na be a little bit fast. So i need your attention, so don't do nothing just listen up! Now after we took a look at the pranks, i do want you to actually familiarize yourself with who's in charge of this business because we're not giving our money to bozos.

We want to make sure we have competent management, so this is the ceo of the company since may 2017. He came from sandisk where he was the founder and ceo until they got bought out by western digital. So he knows his stuff, especially given the fact that, as you'll about to hear in this video micron is super heavy on memory. So this guy knows memory.

He came from sandisk he's, definitely accomplished guys. 62 years old seems to be very knowledgeable, very experienced and based on the results and the financials that i've seen very impressed now check this out. I want you guys to see this, so this company is growing at 20, both for revenue and ebitda per year. So it's a 100 billion dollar company with 20 annual growth.

That's not something we see every day, especially from not one of the leaders in the category and yes, i just said it: micron is not one of the leaders in the semiconductor industry. They only hold about five percent of the market, but they are the leaders in specifically memory. So now, let's talk about the numbers. So, first of all, this is a company that's generating about 41 percent ebitda, which is extremely impressive, 13.5 net income, again extremely impressive.

This is a hundred billion dollar company, so you can expect good numbers - and this point a lot of you may mention rightfully so that the stock almost doubled since late last year. Late 2020, it was a 50 stock. It's now at 85. It means it went through a massive spike and any reasonable person would say based on that that the stock is probably overpriced.

The hype is already over, not exactly. I want you guys to take a look at the multiples. Look at evie to ebitda. Look at ev2 sales look at price to earnings in every single category which you can see on the screen right now.

This is from seeking alpha by the way, every single category they're from 15 to 30, sometimes even 40 underpriced compared to their competitors. Look at this every single one, they're underpriced specifically look at ev2 ebitda for the trailing 12 months, they're at 9.86, which is 54 undervalued compared to their competitors in their category, which is extremely interesting. Now these are just numbers. Let's talk about the business before we dive deep into the cf and all this nerdy stuff.

So what is micro, so micron operate in a very interesting market? They operate in semiconductors and they're. Definitely not the biggest they own about five percent of the market, which is not that big. However, what you need to understand is that micron is what you call a specialty player. You know like in basketball, they have the three nd guys or the guys that only shoot three pointers.

Well, these guys pretty much do memory. That's the only thing: they're really good at so they're, an extremely specialized player and almost to the point where a lot of people see it as a weakness, but i'll tell you why i think it's a huge advantage in this market. First of all, we have a massive chip shortage and, as far as it comes to memory, that shortage is even worse but much like a lot of people will say in the comments section. That's cyclical that's going to blow over true, but at least we got another year of this at minimum, but even after this thing blows over, you got ta ask yourself the question which kind of semiconductor players are still underpriced.

Now these guys do memories, which type of industries require a hell of a lot of memory ai. So the ai industry needs, on average a gazillion times more drams than any pc or any contraption. You can imagine what is the next big industry, ai self-driving? You know autonomous driving, palantirs, there's a lot of examples of data and ai taking over the world, and i think, if you understand that you understand that demand from memory is not going anywhere. If anything, it's about to get worse, even after the chip shortage actually blows over whenever that happens, so i think that these guys, with their numbers, make a lot of sense given how cheap they are and given how much they're growing and they're efficient they're making money.

It's a blue chip, 100 billion evaluation, but let me show you something really cool which i have not seen quite a lot of now. These are the financials for the company. So, just to give you the idea of the structure right here. These are the three month period, and these are the six month period ending at this date right here or this date right here, pretty standard, as you can see right here, the gross margin is growing.

The revenue is growing, everything is going along nicely, however. Here's the kicker, where most people miss check this out, so the company generated 1.6 billion in gross margin, one third of that one third of that went to rnd. That is insane that is investing in your future. Given the fact that these guys invested three times more in research and developing than selling gna and marketing three times more, that is hell impressive and it shows a lot of dedication for their future.

No company that i've seen invested so much more money in r d versus sg a however there's even more impressive stuff about this company. Of course, it's not income profitable and all that good stuff check this out, because this thing is even more impressive. Take a look at how much assets they have, so they have 54 billion in assets. Take a look at how much liabilities they have 13.5, so these guys literally have the highest total assets to liabilities i've seen in a while for freaking x.

Even if you neutralize a goodwill right here, which is pretty much nothing, you take away a billion, it's still 53 billion and 52 billion, it's still 4x assets over liabilities. And now, let's take a look at my dcf, so i assume here that they'll do 10.5 billion. This year in 2021 and then at 10 annual growth 10, which means lower than their guidance. I want to be extremely conservative, nothing shady nothing flashy check this out.

I also assumed at 28 tax, even though this thing hasn't passed from 2022 and so forth, so already built into 28 tax. I also assume 13 billion in capex, which means massive capital expenses. Yeah capic is actually capital expenditures now check this out. I also included a 10 discount rate, which is extremely conservative at 10.5, ebitda, multiple and the four percent perpetual growth, and this is what we got so, as you can see right here, because this is the part you all want to see.

We have the current price at 86 and my price is 126 47 upside versus the actual price we got today. So again, my opinion, i see a 47 upside for this stock. For all the reasons i gave you i'm absolutely gag about it. I think at this price at 85.86 dollars, it's definitely a great entry point for me i'll, be buying a whole lot of it.

I still own no stock of this because i never buy stock before i let you guys the opportunity to do this. I don't front run my audience. Thank you for all our patrons and the channel members that are making these possible. I totally enjoyed making this delicious video.

I wish i could do more. I promise to do it every single time. I find a great stock. Thank you.

So much we'll see you guys next video.