Key Points
The consensus analyst price target for Micron is over $1,400.
The most bullish forecast is for the stock to reach $3,000.
Micron's stock looks incredibly cheap, but if the memory shortage ends, that could change quickly.
Micron Technology (NASDAQ:MU) stock has been falling in recent days, but its market cap remains above the $1 trillion mark for now. While some investors worry about its high valuation, others believe that it's still an incredibly cheap buy with loads of upside, given how cheap it is with respect to earnings.
Ultimately, it comes down to expectations. Those who believe the memory shortage will come to an end in the near future are bearish, while those who expect this to be a new normal and for Micron's numbers to continue soaring are in the bullish camp.
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One extremely bullish analyst recently gave Micron's stock an astounding price target -- $3,000.
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Analysts are generally bullish on Micron's stock
The consensus analyst price target for Micron is just over $1,400, which implies an upside of around 50% based on where it's trading today. And of the 46 analyst ratings, 42 rate the stock as a buy.
One of the more bullish analysts is Gil Luria, from D.A. Davidson. Luria recently set a price target of $3,000 for Micron, raising it from $2,100 previously. That's currently the highest price target for the memory stock, and it suggests an upside of more than 200% for investors who buy it today.
It's an extremely bullish outlook for the stock, and it centers around the expectation that investors will pay a higher earnings multiple for the stock in the future, and that the memory shortage won't come to an end anytime soon. Currently, the stock is trading at an incredibly low forward price-to-earnings multiple of just seven, which is based on analyst expectations. That suggests that there is some apprehension around Micron and its future. Otherwise, investors would surely be buying up the stock at such a modest-looking valuation.
It's important to note, however, that analyst expectations can and will change with new information. But for now, many still remain fairly bullish on Micron.
Micron's stock has plenty of upside, but it's also highly volatile
If the memory shortage does end up lasting for several years, then there could indeed be plenty more room for Micron's stock to rise higher. But in the tech sector, things can change rapidly. And even if the shortage may not end soon, if the market sees an end in sight, investors may sell off before that happens to secure profits.
For investors who are willing to take on that risk and volatility, Micron may be a good buy now that it has dipped below $1,000.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.