Investors love consistency. Case in point: Consumer staple companies — with sales and profits typically steady in any economic climate — trade at an average price-to-earnings ratio of 40. Not so with memory device makers and their wild fluctuations in supply and demand. Case in point: Micron Technology, Inc. (NASDAQ:MU) and, consequently, MU stock.

Demand for much of Micron’s output is subject to the production and development cycle for personal computers (PCs), which have struggled in recent years due to the increased popularity for smartphones and tablets on the consumer side. The business side has steadier demand, but that drops in a recession as businesses cut down on longer-term capital spending.

The supply side is even tougher.

Micron faces a wide range of giant competitors, ranging from Intel Corporation (NASDAQ:INTC) to Western Digital Corp (NASDAQ:WDC). It’s a commodity business where scale and low cost rule. There are the occasional anomalies, such as MU’s joint venture in the non-volatile memory space with Intel.

Micron recently provided its take on the state of industry supply. It believes demand for DRAM (dynamic random access memory devices that provide high-speed data storage and retrieval while a device is powered on) is slowing and will continue to slide. Last year, Micron’s DRAM business made up the bulk of total sales at 58%.

Growth in NAND (non-volatile memory devices that retain memory when turned off) is more robust, but MU sees challenges in the 3D space of the market well into 2018; some 37% of last year’s sales came from NAND businesses.

The Financial Outlook for Micron

Micron believes it can generate $1.5 billion in cash flow this year, or around $1.50 per share. This would be welcome because capital spending was nearly double operating cash flow generated by the business last year.

Both 2014 and 2015 were much stronger, when free cash flow production came in above $2 per share in both years.

Analysts project $4.28 in earnings this year, and $5.14 next year. The current share price is $27.64, so the forward price-to-earnings ratio is quite reasonable, in the single digits. It’s also about half of the MU stock average P/E ratio over the last five years.

Sales should reach $20 billion this year, with a slight bump in 2018. That is a nearly four-fold increase over the last decade. Long-term debt seems significant at $9.2 billion, but it is quite reasonable in the context of $4.3 billion in cash and short-term investments on the balance sheet. In other words, net debt is less than $5 billion.

Bottom Line on MU Stock

It’s hard to get excited about Micron’s investment appeal, however.

Samsung Electronic (OTCMKTS:SSNLF) essentially controls the market for memory devices and the other key rivals are generally much larger, too. As such, Micron is a price-taker in a commodity market, meaning it has little control over pricing.

Therefore, Micron can’t control pricing when the market turns south, and this can hurt profits considerably.

Second-quarter results were solid, but management’s takeaway was that it still needs to reduce costs and deal with a current technology transition to 3D NAND products. This sums up what Micron has to always deal with, which means getting ahead is tough barring a technological breakthrough or scale to jump ahead of the competition.

The long-term trend has been increasing sales, but profit trends have been all over the board. The rock-bottom P/E ratio on MU stock means downside risk is likely minimal, but it is probably deserved given this is a very tough industry to operate in. There is always a chance one of the larger rivals buys Micron, but when that might happen (if at all), is anyone’s guess.

My money has been on Intel. It is a stodgy large-cap tech firm, but also trades at a reasonably low valuation. It sports a dividend yield close to 3%, which is some consolation should the shares trade sideways indefinitely.

Advanced Micro Devices, Inc. (NASDAQ:AMD) has tried to compete with Intel for decades now and has failed to catch its larger rival. Micron’s pursuit of Samsung is likely to follow a similar path.

As of this writing, Ryan Fuhrmann was long INTC.