MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
NASDAQ:MCHP - Nasdaq - US5950171042 - Common Stock - Currency: USD
MCHP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. MCHP has an average financial health and profitability rating. MCHP has a correct valuation and a medium growth rate. MCHP also has an excellent dividend rating.
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.
Each year in the past 5 years MCHP had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MCHP (-0.03%) is comparable to the rest of the industry.
MCHP has a Return On Equity (-0.07%) which is comparable to the rest of the industry.
The Return On Invested Capital of MCHP (2.09%) 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 10.87%.
The last Return On Invested Capital (2.09%) 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 | -0.03% | ||
| ROE | -0.07% | ||
| ROIC | 2.09% |
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 (8.53%) which is in line with its industry peers.
In the last couple of years the Operating Margin of MCHP has declined.
The Gross Margin of MCHP (56.07%) is better than 77.27% of its industry peers.
In the last couple of years the Gross Margin of MCHP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.53% | ||
| PM (TTM) | N/A | ||
| GM | 56.07% |
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.
Compared to 1 year ago, MCHP has more shares outstanding
The number of shares outstanding for MCHP has been increased compared to 5 years ago.
Compared to 1 year ago, MCHP has an improved debt to assets ratio.
2.2 Solvency
MCHP has an Altman-Z score of 3.45. This indicates that MCHP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCHP (3.45) is comparable to the rest of the industry.
The Debt to FCF ratio of MCHP is 7.29, which is on the high side as it means it would take MCHP, 7.29 years of fcf income to pay off all of its debts.
MCHP has a Debt to FCF ratio (7.29) which 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.
MCHP's Debt to Equity ratio of 0.80 is on the low side compared to the rest of the industry. MCHP is outperformed by 82.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.29 | ||
| Altman-Z | 3.45 |
ROIC/WACC0.19
WACC11%
2.3 Liquidity
MCHP has a Current Ratio of 2.59. This indicates that MCHP is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.59, MCHP is in line with its industry, outperforming 41.82% of the companies in the same industry.
MCHP has a Quick Ratio of 1.47. 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 1.47, MCHP is doing worse than 74.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.47 |
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%.
MCHP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -14.29% yearly.
The Revenue for MCHP has decreased by -42.35% in the past year. This is quite bad
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)-42.35%
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 30.75% yearly.
The Revenue is expected to grow by 9.66% on average over the next years. This is quite good.
EPS Next Y9.77%
EPS Next 2Y42.5%
EPS Next 3Y35.61%
EPS Next 5Y30.75%
Revenue Next Year5.04%
Revenue Next 2Y13.27%
Revenue Next 3Y14.44%
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 58.61 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.
Compared to an average S&P500 Price/Earnings ratio of 26.41, MCHP is valued quite expensively.
With a Price/Forward Earnings ratio of 23.09, MCHP is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCHP indicates a somewhat cheap valuation: MCHP is cheaper than 61.82% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 33.87. MCHP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.61 | ||
| Fwd PE | 23.09 |
4.2 Price Multiples
MCHP's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, MCHP is valued a bit cheaper than 65.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.6 | ||
| EV/EBITDA | 33.98 |
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)6
PEG (5Y)N/A
EPS Next 2Y42.5%
EPS Next 3Y35.61%
5. Dividend
5.1 Amount
MCHP has a Yearly Dividend Yield of 2.94%.
MCHP's Dividend Yield is rather good when compared to the industry average which is at 2.47. MCHP pays more dividend than 93.64% of the companies in the same industry.
MCHP's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
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-19912.24%
EPS Next 2Y42.5%
EPS Next 3Y35.61%
60.95
-0.92 (-1.49%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners100.81%
Inst Owner Change0.96%
Ins Owners1.93%
Ins Owner Change1.26%
Market Cap32.89B
Analysts80
Price Target76.42 (25.38%)
Short Float %6.25%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
Yearly Dividend1.81
Dividend Growth(5Y)20.15%
DP-19912.24%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-12.56%
Min EPS beat(2)-27.71%
Max EPS beat(2)2.6%
EPS beat(4)2
Avg EPS beat(4)-5.07%
Min EPS beat(4)-27.71%
Max EPS beat(4)4.85%
EPS beat(8)3
Avg EPS beat(8)-3.08%
EPS beat(12)3
Avg EPS beat(12)-2.3%
EPS beat(16)6
Avg EPS beat(16)-1.31%
Revenue beat(2)0
Avg Revenue beat(2)-2.95%
Min Revenue beat(2)-4.74%
Max Revenue beat(2)-1.17%
Revenue beat(4)0
Avg Revenue beat(4)-2.22%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)-0.95%
Revenue beat(8)0
Avg Revenue beat(8)-2.24%
Revenue beat(12)0
Avg Revenue beat(12)-1.92%
Revenue beat(16)0
Avg Revenue beat(16)-1.75%
PT rev (1m)13.19%
PT rev (3m)27.92%
EPS NQ rev (1m)1.35%
EPS NQ rev (3m)40.14%
EPS NY rev (1m)0%
EPS NY rev (3m)12.59%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)5.28%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)3.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.61 | ||
| Fwd PE | 23.09 | ||
| P/S | 7.47 | ||
| P/FCF | 42.6 | ||
| P/OCF | 36.62 | ||
| P/B | 4.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 33.98 |
EPS(TTM)1.04
EY1.71%
EPS(NY)2.64
Fwd EY4.33%
FCF(TTM)1.43
FCFY2.35%
OCF(TTM)1.66
OCFY2.73%
SpS8.16
BVpS13.12
TBVpS-3.7
PEG (NY)6
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.03% | ||
| ROE | -0.07% | ||
| ROCE | 2.64% | ||
| ROIC | 2.09% | ||
| ROICexc | 2.21% | ||
| ROICexgc | 6.78% | ||
| OM | 8.53% | ||
| PM (TTM) | N/A | ||
| GM | 56.07% | ||
| FCFM | 17.54% |
ROA(3y)8.56%
ROA(5y)7.14%
ROE(3y)20.99%
ROE(5y)18.26%
ROIC(3y)11.93%
ROIC(5y)10.28%
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-Score3
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.29 | ||
| Debt/EBITDA | 5 | ||
| Cap/Depr | 16.8% | ||
| Cap/Sales | 2.86% | ||
| Interest Coverage | 1.59 | ||
| Cash Conversion | 79.79% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 3.45 |
F-Score3
WACC11%
ROIC/WACC0.19
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 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%-13.36%
Revenue Next Year5.04%
Revenue Next 2Y13.27%
Revenue Next 3Y14.44%
Revenue Next 5Y9.66%
EBIT growth 1Y-85.32%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year54.31%
EBIT Next 3Y40.14%
EBIT Next 5Y25%
FCF growth 1Y-70.39%
FCF growth 3Y-32.16%
FCF growth 5Y-12.16%
OCF growth 1Y-68.95%
OCF growth 3Y-31.89%
OCF growth 5Y-10.27%