MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
NASDAQ:MCHP - US5950171042 - Common Stock
63.4825 USD
-1.52 (-2.33%)
MCHP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 112 industry peers in the Semiconductors & Semiconductor Equipment industry. MCHP has only an average score on both its financial health and profitability. While showing a medium growth rate, MCHP is valued expensive at the moment. MCHP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
MCHP had positive earnings in the past year.
In the past year MCHP had a positive cash flow from operations.
MCHP had positive earnings in 4 of the past 5 years.
In the past 5 years MCHP always reported a positive cash flow from operatings.
1.2 Ratios
MCHP's Return On Assets of -1.21% is in line compared to the rest of the industry. MCHP outperforms 43.75% of its industry peers.
With a Return On Equity value of -2.63%, MCHP perfoms like the industry average, outperforming 41.96% of the companies in the same industry.
The Return On Invested Capital of MCHP (1.19%) is comparable to the rest of the industry.
MCHP had an Average Return On Invested Capital over the past 3 years of 11.93%. This is in line with the industry average of 10.74%.
The last Return On Invested Capital (1.19%) for MCHP is well below the 3 year average (11.93%), which needs to be investigated, but indicates that MCHP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.21% | ||
| ROE | -2.63% | ||
| ROIC | 1.19% |
ROA(3y)8.56%
ROA(5y)7.14%
ROE(3y)20.99%
ROE(5y)18.26%
ROIC(3y)11.93%
ROIC(5y)10.28%
1.3 Margins
The Operating Margin of MCHP (4.91%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MCHP has declined.
Looking at the Gross Margin, with a value of 54.48%, MCHP is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Gross Margin of MCHP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.91% | ||
| PM (TTM) | N/A | ||
| GM | 54.48% |
OM growth 3Y-32.35%
OM growth 5Y-8.3%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.92%
GM growth 5Y-1.82%
2. Health
2.1 Basic Checks
MCHP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, MCHP has more shares outstanding
Compared to 5 years ago, MCHP has more shares outstanding
The debt/assets ratio for MCHP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.56 indicates that MCHP is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.56, MCHP is in line with its industry, outperforming 52.68% of the companies in the same industry.
The Debt to FCF ratio of MCHP is 7.52, which is on the high side as it means it would take MCHP, 7.52 years of fcf income to pay off all of its debts.
MCHP has a Debt to FCF ratio (7.52) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.80 indicates that MCHP is somewhat dependend on debt financing.
The Debt to Equity ratio of MCHP (0.80) is worse than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Altman-Z | 3.56 |
ROIC/WACC0.11
WACC11.02%
2.3 Liquidity
MCHP has a Current Ratio of 2.31. This indicates that MCHP is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.31, MCHP is not doing good in the industry: 68.75% of the companies in the same industry are doing better.
A Quick Ratio of 1.33 indicates that MCHP should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.33, MCHP is doing worse than 80.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The earnings per share for MCHP have decreased strongly by -72.63% in the last year.
Measured over the past years, MCHP shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -14.29% on average per year.
Looking at the last year, MCHP shows a very negative growth in Revenue. The Revenue has decreased by -35.70% in the last year.
The Revenue has been decreasing by -3.55% on average over the past years.
EPS 1Y (TTM)-72.63%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-49.06%
Revenue 1Y (TTM)-35.7%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-13.36%
3.2 Future
Based on estimates for the next years, MCHP will show a very strong growth in Earnings Per Share. The EPS will grow by 29.71% on average per year.
Based on estimates for the next years, MCHP will show a quite strong growth in Revenue. The Revenue will grow by 10.04% on average per year.
EPS Next Y16.65%
EPS Next 2Y43.41%
EPS Next 3Y37.94%
EPS Next 5Y29.71%
Revenue Next Year5.46%
Revenue Next 2Y12.91%
Revenue Next 3Y14.52%
Revenue Next 5Y10.04%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 61.04 indicates a quite expensive valuation of MCHP.
The rest of the industry has a similar Price/Earnings ratio as MCHP.
MCHP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.13.
Based on the Price/Forward Earnings ratio of 23.74, the valuation of MCHP can be described as rather expensive.
65.18% of the companies in the same industry are more expensive than MCHP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.76. MCHP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.04 | ||
| Fwd PE | 23.74 |
4.2 Price Multiples
MCHP's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, MCHP is valued a bit cheaper than the industry average as 65.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.22 | ||
| EV/EBITDA | 42.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCHP does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as MCHP's earnings are expected to grow with 37.94% in the coming years.
PEG (NY)3.67
PEG (5Y)N/A
EPS Next 2Y43.41%
EPS Next 3Y37.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.79%, MCHP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.35, MCHP pays a better dividend. On top of this MCHP pays more dividend than 93.75% of the companies listed in the same industry.
MCHP's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
The dividend of MCHP is nicely growing with an annual growth rate of 20.15%!
MCHP has been paying a dividend for at least 10 years, so it has a reliable track record.
MCHP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)20.15%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
The earnings of MCHP are negative and hence is the payout ratio. MCHP will probably not be able to sustain this dividend level.
MCHP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-555.76%
EPS Next 2Y43.41%
EPS Next 3Y37.94%
NASDAQ:MCHP (9/2/2025, 9:39:08 AM)
63.4825
-1.52 (-2.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners100.81%
Inst Owner Change4.5%
Ins Owners1.93%
Ins Owner Change1.72%
Market Cap34.26B
Analysts80
Price Target78.68 (23.94%)
Short Float %4.51%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend1.81
Dividend Growth(5Y)20.15%
DP-555.76%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.2%
Min EPS beat(2)2.6%
Max EPS beat(2)11.8%
EPS beat(4)3
Avg EPS beat(4)-2.11%
Min EPS beat(4)-27.71%
Max EPS beat(4)11.8%
EPS beat(8)4
Avg EPS beat(8)-1.35%
EPS beat(12)4
Avg EPS beat(12)-1.31%
EPS beat(16)6
Avg EPS beat(16)-0.69%
Revenue beat(2)0
Avg Revenue beat(2)-0.61%
Min Revenue beat(2)-1.17%
Max Revenue beat(2)-0.05%
Revenue beat(4)0
Avg Revenue beat(4)-1.73%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)-0.05%
Revenue beat(8)0
Avg Revenue beat(8)-2%
Revenue beat(12)0
Avg Revenue beat(12)-1.83%
Revenue beat(16)0
Avg Revenue beat(16)-1.7%
PT rev (1m)6.55%
PT rev (3m)31.71%
EPS NQ rev (1m)6.52%
EPS NQ rev (3m)25.23%
EPS NY rev (1m)6.26%
EPS NY rev (3m)11.99%
Revenue NQ rev (1m)0.87%
Revenue NQ rev (3m)5.36%
Revenue NY rev (1m)0.4%
Revenue NY rev (3m)2.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.04 | ||
| Fwd PE | 23.74 | ||
| P/S | 8.09 | ||
| P/FCF | 47.22 | ||
| P/OCF | 43.01 | ||
| P/B | 5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 42.5 |
EPS(TTM)1.04
EY1.64%
EPS(NY)2.67
Fwd EY4.21%
FCF(TTM)1.34
FCFY2.12%
OCF(TTM)1.48
OCFY2.33%
SpS7.85
BVpS12.71
TBVpS-3.95
PEG (NY)3.67
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.21% | ||
| ROE | -2.63% | ||
| ROCE | 1.51% | ||
| ROIC | 1.19% | ||
| ROICexc | 1.24% | ||
| ROICexgc | 3.88% | ||
| OM | 4.91% | ||
| PM (TTM) | N/A | ||
| GM | 54.48% | ||
| FCFM | 17.13% |
ROA(3y)8.56%
ROA(5y)7.14%
ROE(3y)20.99%
ROE(5y)18.26%
ROIC(3y)11.93%
ROIC(5y)10.28%
ROICexc(3y)12.2%
ROICexc(5y)10.52%
ROICexgc(3y)48.65%
ROICexgc(5y)43.88%
ROCE(3y)15.1%
ROCE(5y)13.02%
ROICexcg growth 3Y-44.39%
ROICexcg growth 5Y-17.88%
ROICexc growth 3Y-40.07%
ROICexc growth 5Y-9.14%
OM growth 3Y-32.35%
OM growth 5Y-8.3%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.92%
GM growth 5Y-1.82%
F-Score4
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Debt/EBITDA | 5.8 | ||
| Cap/Depr | 9.69% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.69% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 3.56 |
F-Score4
WACC11.02%
ROIC/WACC0.11
Cap/Depr(3y)32.64%
Cap/Depr(5y)27.66%
Cap/Sales(3y)4.12%
Cap/Sales(5y)3.9%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-72.63%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-49.06%
EPS Next Y16.65%
EPS Next 2Y43.41%
EPS Next 3Y37.94%
EPS Next 5Y29.71%
Revenue 1Y (TTM)-35.7%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-13.36%
Revenue Next Year5.46%
Revenue Next 2Y12.91%
Revenue Next 3Y14.52%
Revenue Next 5Y10.04%
EBIT growth 1Y-88.9%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year54.31%
EBIT Next 3Y33.49%
EBIT Next 5Y25.08%
FCF growth 1Y-78%
FCF growth 3Y-32.16%
FCF growth 5Y-12.16%
OCF growth 1Y-78.89%
OCF growth 3Y-31.89%
OCF growth 5Y-10.27%