WBAG:MCHP

Stock Analysis Report

Executive Summary

Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications in the Americas, Europe, and Asia.


Snowflake Analysis

Solid track record with high growth potential and pays a dividend.


Similar Companies

Share Price & News

How has Microchip Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCHP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.3%

MCHP

-2.6%

AT Semiconductor

-0.4%

AT Market


1 Year Return

29.7%

MCHP

61.1%

AT Semiconductor

3.9%

AT Market

Return vs Industry: MCHP underperformed the Austrian Semiconductor industry which returned 61.1% over the past year.

Return vs Market: MCHP exceeded the Austrian Market which returned 3.9% over the past year.


Shareholder returns

MCHPIndustryMarket
7 Day-0.3%-2.6%-0.4%
30 Day3.5%5.5%-0.2%
90 Day22.3%17.0%-0.7%
1 Year31.8%29.7%64.1%61.1%7.7%3.9%
3 Yearn/a99.0%91.5%26.0%14.7%
5 Yearn/a161.7%143.8%52.7%31.5%

Price Volatility Vs. Market

How volatile is Microchip Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Microchip Technology undervalued compared to its fair value and its price relative to the market?

0.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCHP (€101.56) is trading below our estimate of fair value (€102.32)

Significantly Below Fair Value: MCHP is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MCHP is poor value based on its PE Ratio (39.9x) compared to the Semiconductor industry average (29.5x).

PE vs Market: MCHP is poor value based on its PE Ratio (39.9x) compared to the Austrian market (14.2x).


Price to Earnings Growth Ratio

PEG Ratio: MCHP is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: MCHP is overvalued based on its PB Ratio (4.6x) compared to the XE Semiconductor industry average (2.7x).


Next Steps

Future Growth

How is Microchip Technology forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

25.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCHP's forecast earnings growth (25.1% per year) is above the savings rate (-0.1%).

Earnings vs Market: MCHP's earnings (25.1% per year) are forecast to grow faster than the Austrian market (9.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MCHP's revenue (6.7% per year) is forecast to grow faster than the Austrian market (2.7% per year).

High Growth Revenue: MCHP's revenue (6.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCHP's Return on Equity is forecast to be high in 3 years time (31.5%)


Next Steps

Past Performance

How has Microchip Technology performed over the past 5 years?

3.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCHP has high quality earnings.

Growing Profit Margin: MCHP's current net profit margins (12.2%) are higher than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: MCHP's earnings have grown by 3.6% per year over the past 5 years.

Accelerating Growth: MCHP's earnings growth over the past year (96.8%) exceeds its 5-year average (3.6% per year).

Earnings vs Industry: MCHP earnings growth over the past year (96.8%) exceeded the Semiconductor industry -19%.


Return on Equity

High ROE: MCHP's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Microchip Technology's financial position?


Financial Position Analysis

Short Term Liabilities: MCHP's short term assets ($2.1B) do not cover its short term liabilities ($2.3B).

Long Term Liabilities: MCHP's short term assets ($2.1B) do not cover its long term liabilities ($9.6B).


Debt to Equity History and Analysis

Debt Level: MCHP's debt to equity ratio (170.6%) is considered high.

Reducing Debt: MCHP's debt to equity ratio has increased from 59.9% to 170.6% over the past 5 years.

Debt Coverage: MCHP's debt is not well covered by operating cash flow (16.4%).

Interest Coverage: MCHP's interest payments on its debt are not well covered by EBIT (1.6x coverage).


Balance Sheet

Inventory Level: MCHP has a low level of unsold assets or inventory.

Debt Coverage by Assets: MCHP's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Microchip Technology's current dividend yield, its reliability and sustainability?

1.36%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.6%markettop25%4.5%industryaverage1.1%forecastin3Years1.4%

Current dividend yield vs market & industry

Notable Dividend: MCHP's dividend (1.36%) isn’t notable compared to the bottom 25% of dividend payers in the Austrian market (1.58%).

High Dividend: MCHP's dividend (1.36%) is low compared to the top 25% of dividend payers in the Austrian market (4.54%).


Stability and Growth of Payments

Stable Dividend: MCHP's dividends per share have been stable in the past 10 years.

Growing Dividend: MCHP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54%), MCHP's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCHP's dividends in 3 years are forecast to be well covered by earnings (20.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Steve Sanghi (63yo)

28.3yrs

Tenure

US$12,864,939

Compensation

Mr. Stephen Sanghi, also known as Steve, has been the Chief Executive Officer of Microchip Technology Incorporated since October 1991. Mr. Sanghi is employed by Microchip since February 1990. He has been a ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD12.86M) is above average for companies of similar size in the Austrian market ($USD3.60M).

Compensation vs Earnings: Steve's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Sanghi
CEO & Chairman28.3yrsUS$12.86m2.01% $483.1m
Ganesh Moorthy
President & COO4yrsUS$5.82m0.12% $29.7m
James Bjornholt
Senior VP & CFO11.1yrsUS$1.82m0.011% $2.7m
Mitchell Little
Senior VP of Worldwide Sales & Applications1yrsUS$2.39m0.0040% $972.0k
Stephen Drehobl
Senior Vice President of MCU8 & Technology Development Division1yrsUS$2.73m0.0077% $1.8m
Kimberly van Herk
VP, General Counsel & Corporate Secretary0yrsno datano data
Rami Kanama
Vice President of Timing & Communication Group0yrsno datano data
Lauren Carr
Senior Vice President of Global Human Resources1yrsno datano data
Michael Finley
Senior Vice President of Fab Operations1yrsno datano data
Richard Simoncic
Senior Vice President of Analog Power and Interface Business Units1yrsUS$169.26k0.021% $5.1m

1.0yrs

Average Tenure

58yo

Average Age

Experienced Management: MCHP's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Stephen Sanghi
CEO & Chairman28.3yrsUS$12.86m2.01% $483.1m
Matthew Chapman
Independent Director22.8yrsUS$164.64k0.0086% $2.1m
Wade Meyercord
Independent Director20.7yrsUS$164.64k0.0086% $2.1m
L. Day
Independent Director25.2yrsUS$164.64k0.0045% $1.1m
Esther Johnson
Independent Director6.3yrsUS$164.64k0.0034% $820.8k

22.8yrs

Average Tenure

68yo

Average Age

Experienced Board: MCHP's board of directors are seasoned and experienced ( 22.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Microchip Technology Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Microchip Technology Incorporated
  • Ticker: MCHP
  • Exchange: WBAG
  • Founded: 1989
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$25.901b
  • Listing Market Cap: US$24.000b
  • Shares outstanding: 239.54m
  • Website: https://www.microchip.com

Number of Employees


Location

  • Microchip Technology Incorporated
  • 2355 West Chandler Boulevard
  • Chandler
  • Arizona
  • 85224
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCHPNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1993
MIRSEAQ (SEAQ International)YesCommon StockGBGBPMar 1993
MCPDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1993
MCHPWBAG (Wiener Boerse AG)YesCommon StockATEURMar 1993
MCHP *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 1993
MCPETLX (Eurotlx)YesCommon StockITEURMar 1993
0K19LSE (London Stock Exchange)YesCommon StockGBUSDMar 1993
M1CH34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 2 COMBRBRLDec 2019

Biography

Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications in the Americas, Europe, and Asia. The company offers general purpose and specialized 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit microprocessors; and microcontrollers for automotive, industrial, computing, communication, lighting, power supplies, motor control, human machine interface, security, and wired and wireless connectivity applications. It also provides development tools that enable system designers to program microcontroller products for specific applications; field-programmable gate array (FPGA) products; and analog, power, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, discrete diodes and metal oxide semiconductor field effect transistors (MOSFETS), radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products. In addition, the company offers memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random access memories, and serial electrically erasable random access memories for the production of very small footprint devices; and licenses its SuperFlash embedded flash and Smartbits one time programmable NVM technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, analog, and neuromorphic compute products that require embedded non-volatile memory, as well as provides engineering services. Further, it provides wafer foundry and assembly and test subcontracting manufacturing services; and aerospace and timing systems products, application specific integrated circuits, and complex programmable logic devices. Microchip Technology Incorporated was founded in 1989 and is headquartered in Chandler, Arizona. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 23:33
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.