Micron shares have been trapped in a holding pattern this month, weighed down by weakening demand across the broader memory sector. The stock has slipped below its key support level at $1,000 and now sits more than 22% below its yearly peak. However, its next quarterly earnings release may provide the spark needed to turn the tide.

Micron's Earnings Report Could Be the Turning Point

Micron Technology has entered bear-market territory, tumbling 22% from its 52-week high. This slide mirrors weakness seen in fellow memory heavyweights such as Samsung Electronics, SK Hynix, SanDisk, Kioxia, and Western Digital. The Roundhill Memory ETF has also suffered, dropping 27% from its own peak.

There is a potential upside trigger on the horizon for Micron, though. The company is set to release its fiscal fourth-quarter results on September 30th.

Wall Street expects these numbers to confirm that revenue growth continued to pick up pace during the quarter. In its previous update, management projected revenue of $51 billion, a massive 350% jump year over year. Given Micron’s historically cautious guidance style, the actual figures are likely to come in ahead of those estimates.

The firm also guided for gross margins to surge to around 84%, supported by firmer memory pricing amid steady demand conditions. If that forecast holds, it would place Micron among the most profitable companies in the United States.

There are no indications that business momentum slackened during the quarter. Major clients, including Nvidia, AMD, Microsoft, and Meta Platforms, have all posted solid results and signaled continued heavy investment. Additionally, Micron has locked in long-term supply agreements with its largest customers.

Given these factors, the upcoming report is likely to be strong, possibly accompanied by an upward revision to full-year guidance. Current consensus points to revenue climbing 88% to $244 billion in the next fiscal year, with earnings per share (EPS) projected to rise from $73 this year to $156.

Micron Looks Undervalued on Several Valuation Metrics

This upcoming earnings season arrives as Micron’s valuation has become increasingly attractive. Its forward price-to-earnings ratio has compressed to roughly 13, well below its five-year average of 74. That figure also undercuts the S&P 500’s current multiple of around 19.

The stock also looks cheap using the Rule of 40 framework. Combining its revenue growth rate with its profit margin yields a score of 426%, far exceeding the critical threshold of 40.

That compelling valuation could set the stage for a larger share buyback program, perhaps announced as early as December. Micron's repurchase activity has been largely constrained by its involvement in the CHIPS Act, which had placed a two-year cap on buybacks. Once those restrictions lapse, the company may unveil a substantial capital return plan.