- Micron's revenue quintupled over the past two years and adjusted net income rose 10,686% over the period, with next year's anticipated net income of $179.2 billion versus $791 million in the fiscal year ended August 29, 2024.
- Options markets price a ~6% post-earnings move, equal to roughly $73.3 billion of market value and more than General Motors' entire capitalization.
- The stock trades below 7x 2027 estimated earnings, but that multiple rests on extraordinary gross margins of 86% that historically sow the next supply glut and margin collapse.
- Khouw's trade is a November 900/1300 short strangle collecting about $65, or 6% of the stock price over roughly seven weeks, a 40% annualized rate of return with a nearly 71% probability of profit.
Quotes
“options markets imply a move of ~6% higher or lower”
“86% gross margins don't last forever, which puts this great company about where it belongs.”
“a November 900/1300 short-strangle collects ~$65 as of Friday's closing prices, or 6% of the current stock price over the next 7 weeks or so”
“Recent price action also suggests channel checks going into the print have generally been positive.”