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. Both the profitability and the financial health of MCHP get a neutral evaluation. Nothing too spectacular is happening here. MCHP is valied quite expensively at the moment, while 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.
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 in line with its industry peers.
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 10.70%.
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 (6.49%) which is comparable to the rest of the industry.
Looking at the Operating Margin, with a value of 13.47%, MCHP is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MCHP has declined.
MCHP has a better Gross Margin (57.95%) than 80.00% of its industry peers.
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
MCHP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for MCHP has been increased compared to 1 year ago.
MCHP has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, MCHP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.61 indicates that MCHP is not in any danger for bankruptcy at the moment.
MCHP has a Altman-Z score (3.61) which is comparable to the rest of the 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.
MCHP's Debt to FCF ratio of 6.96 is in line compared to the rest of the industry. MCHP outperforms 50.91% of its industry peers.
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 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 6.96 | ||
| Altman-Z | 3.61 |
ROIC/WACC0.32
WACC11.15%
2.3 Liquidity
MCHP has a Current Ratio of 2.25. This indicates that MCHP is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of MCHP (2.25) is worse than 68.18% 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.
MCHP has a Quick ratio of 1.23. This is amonst the worse of the industry: MCHP underperforms 81.82% of its industry peers.
| 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%.
MCHP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -14.29% yearly.
Looking at the last year, MCHP shows a very negative growth in Revenue. The Revenue has decreased by -42.35% in the last year.
MCHP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.55% yearly.
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
MCHP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.75% yearly.
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 Y9.77%
EPS Next 2Y42.5%
EPS Next 3Y35.61%
EPS Next 5Y30.75%
Revenue Next Year5.08%
Revenue Next 2Y13.47%
Revenue Next 3Y14.7%
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.
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 57.69 indicates a quite expensive valuation of MCHP.
Compared to the rest of the industry, the Price/Earnings ratio of MCHP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.46. MCHP is valued rather expensively when compared to this.
MCHP is valuated quite expensively with a Price/Forward Earnings ratio of 52.56.
The rest of the industry has a similar Price/Forward Earnings ratio as MCHP.
When comparing the Price/Forward Earnings ratio of MCHP to the average of the S&P500 Index (36.44), we can say MCHP is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.69 | ||
| Fwd PE | 52.56 |
4.2 Price Multiples
MCHP's Enterprise Value to EBITDA is on the same level as the industry average.
67.27% of the companies in the same industry are more expensive than MCHP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.71 | ||
| EV/EBITDA | 32.36 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as MCHP's earnings are expected to grow with 35.61% in the coming years.
PEG (NY)5.9
PEG (5Y)N/A
EPS Next 2Y42.5%
EPS Next 3Y35.61%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.45%, MCHP has a reasonable but not impressive dividend return.
MCHP's Dividend Yield is rather good when compared to the industry average which is at 2.21. MCHP pays more dividend than 91.82% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, MCHP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
On average, the dividend of MCHP grows each year by 18.25%, which is quite nice.
MCHP has paid a dividend for at least 10 years, which is 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)18.25%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
315.22% of the earnings are spent on dividend by MCHP. This is not a sustainable payout ratio.
The dividend of MCHP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP315.22%
EPS Next 2Y42.5%
EPS Next 3Y35.61%
NASDAQ:MCHP (7/22/2025, 2:48:00 PM)
75
+1.15 (+1.56%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners100.8%
Inst Owner Change-0.21%
Ins Owners1.91%
Ins Owner Change1.26%
Market Cap40.48B
Analysts79.35
Price Target73.85 (-1.53%)
Short Float %6.69%
Short Ratio3.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
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)13.79%
PT rev (3m)10.5%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.27%
EPS NY rev (1m)2.47%
EPS NY rev (3m)12.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.79%
Revenue NY rev (3m)2.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.69 | ||
| Fwd PE | 52.56 | ||
| P/S | 8.51 | ||
| P/FCF | 41.71 | ||
| P/OCF | 36.07 | ||
| P/B | 6.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 32.36 |
EPS(TTM)1.3
EY1.73%
EPS(NY)1.43
Fwd EY1.9%
FCF(TTM)1.8
FCFY2.4%
OCF(TTM)2.08
OCFY2.77%
SpS8.81
BVpS11.18
TBVpS-5.88
PEG (NY)5.9
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 | 3.61 |
F-Score5
WACC11.15%
ROIC/WACC0.32
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 Y9.77%
EPS Next 2Y42.5%
EPS Next 3Y35.61%
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 Year5.08%
Revenue Next 2Y13.47%
Revenue Next 3Y14.7%
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 3Y32.02%
EBIT Next 5Y25%
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