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MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis

NASDAQ:MCHP - Nasdaq - US5950171042 - Common Stock - Currency: USD

60.8  +0.23 (+0.38%)

After market: 60.75 -0.05 (-0.08%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to MCHP. MCHP was compared to 110 industry peers in the Semiconductors & Semiconductor Equipment industry. While MCHP belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MCHP does not seem to be growing, but still is valued expensively. MCHP also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

MCHP had positive earnings in the past year.
MCHP had a positive operating cash flow in the past year.
Of the past 5 years MCHP 4 years were profitable.
MCHP had a positive operating cash flow in 4 of the past 5 years.
MCHP Yearly Net Income VS EBIT VS OCF VS FCFMCHP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

1.2 Ratios

MCHP has a Return On Assets (1.98%) which is comparable to the rest of the industry.
The Return On Equity of MCHP (5.12%) is comparable to the rest of the industry.
MCHP has a Return On Invested Capital (3.53%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for MCHP is above the industry average of 11.17%.
The 3 year average ROIC (14.53%) for MCHP is well above the current ROIC(3.53%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 1.98%
ROE 5.12%
ROIC 3.53%
ROA(3y)11.21%
ROA(5y)7.8%
ROE(3y)28.27%
ROE(5y)20.31%
ROIC(3y)14.53%
ROIC(5y)10.53%
MCHP Yearly ROA, ROE, ROICMCHP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

MCHP's Profit Margin of 6.49% is in line compared to the rest of the industry. MCHP outperforms 57.27% of its industry peers.
In the last couple of years the Profit Margin of MCHP has grown nicely.
With a decent Operating Margin value of 13.47%, MCHP is doing good in the industry, outperforming 69.09% of the companies in the same industry.
In the last couple of years the Operating Margin of MCHP has grown nicely.
The Gross Margin of MCHP (57.95%) is better than 81.82% of its industry peers.
In the last couple of years the Gross Margin of MCHP has grown nicely.
Industry RankSector Rank
OM 13.47%
PM (TTM) 6.49%
GM 57.95%
OM growth 3Y22.16%
OM growth 5Y19.11%
PM growth 3Y57.24%
PM growth 5Y30.29%
GM growth 3Y1.74%
GM growth 5Y3.61%
MCHP Yearly Profit, Operating, Gross MarginsMCHP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MCHP is creating some value.
There is no outstanding debt for MCHP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
MCHP Yearly Shares OutstandingMCHP Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
MCHP Yearly Total Debt VS Total AssetsMCHP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

2.2 Solvency

MCHP has an Altman-Z score of 3.16. This indicates that MCHP is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.16, MCHP perfoms like the industry average, outperforming 50.00% 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.
With a Debt to FCF ratio value of 6.96, MCHP perfoms like the industry average, outperforming 51.82% 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.
MCHP has a Debt to Equity ratio of 1.12. This is amonst the worse of the industry: MCHP underperforms 89.09% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.12
Debt/FCF 6.96
Altman-Z 3.16
ROIC/WACC0.32
WACC10.89%
MCHP Yearly LT Debt VS Equity VS FCFMCHP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

2.3 Liquidity

A Current Ratio of 2.25 indicates that MCHP has no problem at all paying its short term obligations.
The Current ratio of MCHP (2.25) is worse than 66.36% of its industry peers.
MCHP has a Quick Ratio of 1.23. This is a normal value and indicates that MCHP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.23, MCHP is doing worse than 80.00% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.25
Quick Ratio 1.23
MCHP Yearly Current Assets VS Current LiabilitesMCHP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

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3

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%.
MCHP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -14.29% yearly.
EPS 1Y (TTM)-73.52%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-80.7%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-26.8%

3.2 Future

The Earnings Per Share is expected to grow by 35.61% on average over the next years. This is a very strong growth
MCHP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.10% yearly.
EPS Next Y4.16%
EPS Next 2Y39.33%
EPS Next 3Y32.99%
EPS Next 5Y35.61%
Revenue Next Year3.19%
Revenue Next 2Y12.27%
Revenue Next 3Y13.31%
Revenue Next 5Y13.1%

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.
MCHP Yearly Revenue VS EstimatesMCHP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B 8B
MCHP Yearly EPS VS EstimatesMCHP Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2 4 6

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3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 46.77, MCHP can be considered very expensive at the moment.
MCHP's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.60, MCHP is valued quite expensively.
A Price/Forward Earnings ratio of 44.90 indicates a quite expensive valuation of MCHP.
MCHP's Price/Forward Earnings is on the same level as the industry average.
MCHP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.43.
Industry RankSector Rank
PE 46.77
Fwd PE 44.9
MCHP Price Earnings VS Forward Price EarningsMCHP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as MCHP.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCHP indicates a somewhat cheap valuation: MCHP is cheaper than 68.18% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 33.7
EV/EBITDA 27.33
MCHP Per share dataMCHP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of MCHP may justify a higher PE ratio.
MCHP's earnings are expected to grow with 32.99% in the coming years. This may justify a more expensive valuation.
PEG (NY)11.24
PEG (5Y)N/A
EPS Next 2Y39.33%
EPS Next 3Y32.99%

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7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.99%, MCHP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.41, MCHP pays a better dividend. On top of this MCHP pays more dividend than 92.73% of the companies listed in the same industry.
MCHP's Dividend Yield is a higher than the S&P500 average which is at 2.36.
Industry RankSector Rank
Dividend Yield 2.99%

5.2 History

The dividend of MCHP is nicely growing with an annual growth rate of 18.25%!
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
MCHP Yearly Dividends per shareMCHP Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5

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 3Y32.99%
MCHP Yearly Income VS Free CF VS DividendMCHP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B
MCHP Dividend Payout.MCHP Dividend Payout, showing the Payout Ratio.MCHP Dividend Payout.PayoutRetained Earnings

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MICROCHIP TECHNOLOGY INC

NASDAQ:MCHP (5/20/2025, 8:14:30 PM)

After market: 60.75 -0.05 (-0.08%)

60.8

+0.23 (+0.38%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)05-08 2025-05-08/amc
Earnings (Next)07-30 2025-07-30/amc
Inst Owners99.38%
Inst Owner Change0%
Ins Owners1.92%
Ins Owner Change0.4%
Market Cap32.70B
Analysts78.67
Price Target59.74 (-1.74%)
Short Float %6.28%
Short Ratio2.57
Dividend
Industry RankSector Rank
Dividend Yield 2.99%
Yearly Dividend1.69
Dividend Growth(5Y)18.25%
DP315.22%
Div Incr Years13
Div Non Decr Years13
Ex-Date05-22 2025-05-22 (0.455)
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)-10.61%
PT rev (3m)-25.8%
EPS NQ rev (1m)-0.27%
EPS NQ rev (3m)-6.33%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.63%
Valuation
Industry RankSector Rank
PE 46.77
Fwd PE 44.9
P/S 6.87
P/FCF 33.7
P/OCF 29.14
P/B 5.42
P/tB N/A
EV/EBITDA 27.33
EPS(TTM)1.3
EY2.14%
EPS(NY)1.35
Fwd EY2.23%
FCF(TTM)1.8
FCFY2.97%
OCF(TTM)2.09
OCFY3.43%
SpS8.84
BVpS11.21
TBVpS-5.9
PEG (NY)11.24
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 1.98%
ROE 5.12%
ROCE 4.48%
ROIC 3.53%
ROICexc 3.68%
ROICexgc 11.18%
OM 13.47%
PM (TTM) 6.49%
GM 57.95%
FCFM 20.4%
ROA(3y)11.21%
ROA(5y)7.8%
ROE(3y)28.27%
ROE(5y)20.31%
ROIC(3y)14.53%
ROIC(5y)10.53%
ROICexc(3y)14.84%
ROICexc(5y)10.75%
ROICexgc(3y)59.35%
ROICexgc(5y)46.01%
ROCE(3y)18.45%
ROCE(5y)13.37%
ROICexcg growth 3Y18.42%
ROICexcg growth 5Y15.98%
ROICexc growth 3Y39.37%
ROICexc growth 5Y32.47%
OM growth 3Y22.16%
OM growth 5Y19.11%
PM growth 3Y57.24%
PM growth 5Y30.29%
GM growth 3Y1.74%
GM growth 5Y3.61%
F-Score5
Asset Turnover0.3
Health
Industry RankSector 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 3.16
F-Score5
WACC10.89%
ROIC/WACC0.32
Cap/Depr(3y)37.83%
Cap/Depr(5y)25.41%
Cap/Sales(3y)4.97%
Cap/Sales(5y)3.58%
Profit Quality(3y)156.39%
Profit Quality(5y)249.98%
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 3Y32.99%
EPS Next 5Y35.61%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-26.8%
Revenue Next Year3.19%
Revenue Next 2Y12.27%
Revenue Next 3Y13.31%
Revenue Next 5Y13.1%
EBIT growth 1Y-79.8%
EBIT growth 3Y36.78%
EBIT growth 5Y27.89%
EBIT Next Year-55.97%
EBIT Next 3Y-9.72%
EBIT Next 5Y6.3%
FCF growth 1Y-69.4%
FCF growth 3Y12.65%
FCF growth 5Y12.52%
OCF growth 1Y-69.33%
OCF growth 3Y14.71%
OCF growth 5Y11.55%