MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
USA - NASDAQ:MCHP - US5950171042 - Common Stock
65.135 USD
-0.21 (-0.33%)
65.135 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to MCHP. MCHP was compared to 112 industry peers in the Semiconductors & Semiconductor Equipment industry. MCHP has an average financial health and profitability rating. MCHP is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCHP was profitable.
MCHP had a positive operating cash flow in the past year.
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 has a Return On Assets (-1.21%) which is comparable to the rest of the industry.
MCHP has a Return On Equity of -2.63%. This is comparable to the rest of the industry: MCHP outperforms 41.96% of its industry peers.
The Return On Invested Capital of MCHP (1.19%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for MCHP is in line with the industry average of 10.98%.
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
MCHP has a Operating Margin of 4.91%. This is comparable to the rest of the industry: MCHP outperforms 52.68% of its industry peers.
In the last couple of years the Operating Margin of MCHP has declined.
The Gross Margin of MCHP (54.48%) is better than 71.43% of its industry peers.
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 3.57 indicates that MCHP is not in any danger for bankruptcy at the moment.
MCHP's Altman-Z score of 3.57 is in line compared to the rest of the industry. MCHP outperforms 50.00% of its industry peers.
MCHP has a debt to FCF ratio of 7.52. This is a slightly negative value and a sign of low solvency as MCHP would need 7.52 years to pay back of all of its debts.
The Debt to FCF ratio of MCHP (7.52) is comparable to the rest of the industry.
MCHP has a Debt/Equity ratio of 0.80. This is a neutral value indicating MCHP is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.80, MCHP is doing worse than 80.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Altman-Z | 3.57 |
ROIC/WACC0.11
WACC11.22%
2.3 Liquidity
A Current Ratio of 2.31 indicates that MCHP has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.31, MCHP is doing worse than 66.96% of the companies in the same industry.
A Quick Ratio of 1.33 indicates that MCHP should not have too much problems paying its short term obligations.
MCHP's Quick ratio of 1.33 is on the low side compared to the rest of the industry. MCHP is outperformed by 79.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
MCHP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -72.63%.
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.
MCHP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -35.70%.
MCHP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.55% yearly.
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
MCHP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.71% yearly.
The Revenue is expected to grow by 10.04% on average over the next years. This is quite good.
EPS Next Y16.62%
EPS Next 2Y43.36%
EPS Next 3Y38.15%
EPS Next 5Y29.71%
Revenue Next Year5.44%
Revenue Next 2Y12.92%
Revenue Next 3Y14.45%
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
The Price/Earnings ratio is 62.63, which means the current valuation is very expensive for 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 27.40.
MCHP is valuated rather expensively with a Price/Forward Earnings ratio of 24.38.
MCHP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MCHP is cheaper than 74.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.94, MCHP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.63 | ||
| Fwd PE | 24.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCHP is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, MCHP is valued a bit cheaper than the industry average as 67.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.45 | ||
| EV/EBITDA | 42.7 |
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 38.15% in the coming years.
PEG (NY)3.77
PEG (5Y)N/A
EPS Next 2Y43.36%
EPS Next 3Y38.15%
5. Dividend
5.1 Amount
MCHP has a Yearly Dividend Yield of 2.76%.
Compared to an average industry Dividend Yield of 2.15, MCHP pays a better dividend. On top of this MCHP pays more dividend than 92.86% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, MCHP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
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 their dividend for at least 10 years, which is a reliable track record.
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 2Y43.36%
EPS Next 3Y38.15%
65.135
-0.21 (-0.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners104.37%
Inst Owner Change0.5%
Ins Owners1.93%
Ins Owner Change1.71%
Market Cap35.15B
Analysts79.39
Price Target77.7 (19.29%)
Short Float %4.26%
Short Ratio2.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.76% |
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)-1.25%
PT rev (3m)15.08%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)9.98%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)8.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.85%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.63 | ||
| Fwd PE | 24.38 | ||
| P/S | 8.3 | ||
| P/FCF | 48.45 | ||
| P/OCF | 44.13 | ||
| P/B | 5.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 42.7 |
EPS(TTM)1.04
EY1.6%
EPS(NY)2.67
Fwd EY4.1%
FCF(TTM)1.34
FCFY2.06%
OCF(TTM)1.48
OCFY2.27%
SpS7.85
BVpS12.71
TBVpS-3.95
PEG (NY)3.77
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 | 3.57 |
F-Score4
WACC11.22%
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 Y16.62%
EPS Next 2Y43.36%
EPS Next 3Y38.15%
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 Year5.44%
Revenue Next 2Y12.92%
Revenue Next 3Y14.45%
Revenue Next 5Y10.04%
EBIT growth 1Y-88.9%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year72.2%
EBIT Next 3Y31.33%
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%