What Can Cause A 30% Drop In Micron Stock?

Core Insights - Micron Technology has experienced significant stock volatility, with declines exceeding 30% in less than two months on multiple occasions, resulting in substantial market capitalization losses [2] Risk Factors - Executive leadership has been cashing out shares during peak excitement, indicating potential concerns about future performance and shareholder trust [3][9] - Intense price competition in the High Bandwidth Memory (HBM) market is expected as rivals like Samsung and SK Hynix ramp up production, which may lead to a decrease in gross margins [4][9] Historical Performance - Micron's stock has shown extreme vulnerability during market downturns, with declines of 88% during the 2008 Financial Crisis, 82% during the Dot-Com crash, and approximately 54% during the 2018 correction [5] - Recent downturns, including the pandemic and inflation surge, have also caused declines of about 42-50% [5] Financial Metrics - Micron reported a revenue growth of 45.4% over the last twelve months and a 28.3% average growth over the last three years [10] - The company has a free cash flow margin of approximately 11.0% and an operating margin of 32.5% for the last twelve months [10] - The stock is currently trading at a P/E ratio of 31.9 [10]