MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
NASDAQ:MCHP - Nasdaq - US5950171042 - Common Stock - Currency: USD
Overall MCHP gets a fundamental rating of 4 out of 10. We evaluated MCHP against 110 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
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.
Of the past 5 years MCHP 4 years had a positive operating cash flow.
1.2 Ratios
MCHP has a Return On Assets (1.98%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 5.12%, MCHP is in line with its industry, outperforming 57.27% of the companies in the same industry.
With a Return On Invested Capital value of 3.54%, MCHP perfoms like the industry average, outperforming 55.45% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MCHP is in line with the industry average of 10.57%.
The last Return On Invested Capital (3.54%) 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 | 1.98% | ||
| ROE | 5.12% | ||
| ROIC | 3.54% |
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 Profit Margin of 6.49%. This is comparable to the rest of the industry: MCHP outperforms 56.36% of its industry peers.
MCHP has a better Operating Margin (13.47%) than 70.00% of its industry peers.
In the last couple of years the Operating Margin of MCHP has declined.
With an excellent Gross Margin value of 57.95%, MCHP belongs to the best of the industry, outperforming 80.91% of the companies in the same industry.
MCHP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.47% | ||
| PM (TTM) | 6.49% | ||
| GM | 57.95% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MCHP is still creating some value.
The number of shares outstanding for MCHP has been increased compared to 1 year ago.
The number of shares outstanding for MCHP has been increased compared to 5 years ago.
The debt/assets ratio for MCHP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.42 indicates that MCHP is not in any danger for bankruptcy at the moment.
With a Altman-Z score value of 3.42, MCHP perfoms like the industry average, outperforming 51.82% of the companies in the same industry.
The Debt to FCF ratio of MCHP is 6.96, which is on the high side as it means it would take MCHP, 6.96 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.96, MCHP is in line with its industry, outperforming 50.91% of the companies in the same industry.
MCHP has a Debt/Equity ratio of 1.12. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.12, MCHP is not doing good in the industry: 90.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 6.96 | ||
| Altman-Z | 3.42 |
ROIC/WACC0.33
WACC10.75%
2.3 Liquidity
A Current Ratio of 2.25 indicates that MCHP has no problem at all paying its short term obligations.
MCHP has a worse Current ratio (2.25) than 68.18% of its industry peers.
A Quick Ratio of 1.23 indicates that MCHP should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.23, MCHP is not doing good in the industry: 81.82% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.25 | ||
| Quick Ratio | 1.23 |
3. Growth
3.1 Past
MCHP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -73.52%.
The earnings per share for MCHP have been decreasing by -14.29% on average. This is quite bad
The Revenue for MCHP has decreased by -42.35% in the past year. This is quite bad
Measured over the past years, MCHP shows a decrease in Revenue. The Revenue has been decreasing by -3.55% on average per year.
EPS 1Y (TTM)-73.52%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-80.7%
Revenue 1Y (TTM)-42.35%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-26.8%
3.2 Future
The Earnings Per Share is expected to grow by 30.75% on average over the next years. This is a very strong growth
Based on estimates for the next years, MCHP will show a quite strong growth in Revenue. The Revenue will grow by 9.66% on average per year.
EPS Next Y4.16%
EPS Next 2Y39.33%
EPS Next 3Y36.16%
EPS Next 5Y30.75%
Revenue Next Year4.13%
Revenue Next 2Y12.63%
Revenue Next 3Y13.47%
Revenue Next 5Y9.66%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
MCHP is valuated quite expensively with a Price/Earnings ratio of 53.50.
MCHP's Price/Earnings is on the same level as the industry average.
MCHP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.53.
With a Price/Forward Earnings ratio of 51.36, MCHP can be considered very expensive at the moment.
MCHP's Price/Forward Earnings ratio is in line with the industry average.
MCHP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.5 | ||
| Fwd PE | 51.36 |
4.2 Price Multiples
MCHP's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCHP indicates a somewhat cheap valuation: MCHP is cheaper than 66.36% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.66 | ||
| EV/EBITDA | 30.15 |
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 36.16% in the coming years.
PEG (NY)12.86
PEG (5Y)N/A
EPS Next 2Y39.33%
EPS Next 3Y36.16%
5. Dividend
5.1 Amount
MCHP has a Yearly Dividend Yield of 2.83%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.61, MCHP pays a better dividend. On top of this MCHP pays more dividend than 91.82% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, MCHP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
5.2 History
On average, the dividend of MCHP grows each year by 18.25%, which is quite nice.
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)18.25%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
MCHP pays out 315.22% of its income as dividend. This is not a sustainable payout ratio.
MCHP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP315.22%
EPS Next 2Y39.33%
EPS Next 3Y36.16%
NASDAQ:MCHP (6/10/2025, 10:41:10 AM)
69.55
+1.5 (+2.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners99.38%
Inst Owner Change0.03%
Ins Owners1.92%
Ins Owner Change1.26%
Market Cap37.52B
Analysts79.33
Price Target64.9 (-6.69%)
Short Float %5.78%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
Yearly Dividend1.69
Dividend Growth(5Y)18.25%
DP315.22%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-11.43%
Min EPS beat(2)-27.71%
Max EPS beat(2)4.85%
EPS beat(4)1
Avg EPS beat(4)-6.38%
Min EPS beat(4)-27.71%
Max EPS beat(4)4.85%
EPS beat(8)2
Avg EPS beat(8)-3.51%
EPS beat(12)3
Avg EPS beat(12)-2.05%
EPS beat(16)6
Avg EPS beat(16)-1.21%
Revenue beat(2)0
Avg Revenue beat(2)-2.84%
Min Revenue beat(2)-4.74%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-2.49%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)-0.95%
Revenue beat(8)0
Avg Revenue beat(8)-2.3%
Revenue beat(12)0
Avg Revenue beat(12)-1.88%
Revenue beat(16)0
Avg Revenue beat(16)-1.75%
PT rev (1m)5.22%
PT rev (3m)-0.2%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.28%
EPS NY rev (1m)6.84%
EPS NY rev (3m)5.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.02%
Revenue NY rev (1m)3.82%
Revenue NY rev (3m)1.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.5 | ||
| Fwd PE | 51.36 | ||
| P/S | 7.89 | ||
| P/FCF | 38.66 | ||
| P/OCF | 33.43 | ||
| P/B | 6.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 30.15 |
EPS(TTM)1.3
EY1.87%
EPS(NY)1.35
Fwd EY1.95%
FCF(TTM)1.8
FCFY2.59%
OCF(TTM)2.08
OCFY2.99%
SpS8.82
BVpS11.18
TBVpS-5.88
PEG (NY)12.86
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.98% | ||
| ROE | 5.12% | ||
| ROCE | 4.48% | ||
| ROIC | 3.54% | ||
| ROICexc | 3.69% | ||
| ROICexgc | 11.22% | ||
| OM | 13.47% | ||
| PM (TTM) | 6.49% | ||
| GM | 57.95% | ||
| FCFM | 20.4% |
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)47.13%
ROICexgc(5y)42.97%
ROCE(3y)15.1%
ROCE(5y)13.02%
ROICexcg growth 3Y-61.75%
ROICexcg growth 5Y-34.4%
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-Score5
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 6.96 | ||
| Debt/EBITDA | 4.75 | ||
| Cap/Depr | 19.44% | ||
| Cap/Sales | 3.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.91% | ||
| Profit Quality | 314.22% | ||
| Current Ratio | 2.25 | ||
| Quick Ratio | 1.23 | ||
| Altman-Z | 3.42 |
F-Score5
WACC10.75%
ROIC/WACC0.33
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-73.52%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-80.7%
EPS Next Y4.16%
EPS Next 2Y39.33%
EPS Next 3Y36.16%
EPS Next 5Y30.75%
Revenue 1Y (TTM)-42.35%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-26.8%
Revenue Next Year4.13%
Revenue Next 2Y12.63%
Revenue Next 3Y13.47%
Revenue Next 5Y9.66%
EBIT growth 1Y-79.8%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year40.73%
EBIT Next 3Y40.98%
EBIT Next 5Y43.2%
FCF growth 1Y-65.53%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-64.62%
OCF growth 3YN/A
OCF growth 5YN/A