NasdaqGS: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

Fundamentals

Reasonable growth potential average dividend payer.


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


Market Performance


7 Day Return

-4.8%

MCHP

-2.5%

US Semiconductor

-0.6%

US Market


1 Year Return

9.3%

MCHP

7.5%

US Semiconductor

0.6%

US Market

MCHP matched the Semiconductor industry (9.4%) over the past year.

MCHP outperformed the Market in United States of America which returned 1.1% over the past year.


Share holder returns

MCHPIndustryMarket
7 Day-4.8%-2.5%-0.6%
30 Day1.6%3.2%2.2%
90 Day6.3%10.1%1.1%
1 Year11.2%9.3%9.6%7.5%2.9%0.6%
3 Year57.4%49.2%79.9%69.3%44.6%35.2%
5 Year112.9%90.0%119.3%97.0%61.9%44.2%

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

Valuation

Is Microchip Technology undervalued based on future cash flows and its price relative to the stock market?

57.76x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Microchip Technology's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Microchip Technology's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Microchip Technology is overvalued based on earnings compared to the US Semiconductor industry average.

Microchip Technology is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

Microchip Technology is good value based on expected growth next year.


Price Based on Value of Assets

Microchip Technology is overvalued based on assets compared to the US Semiconductor industry average.


Next Steps

Future Growth

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

64.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Microchip Technology's revenue is expected to grow by 6.5% yearly, however this is not considered high growth (20% yearly).

Microchip Technology's earnings are expected to grow significantly at over 20% yearly.

Microchip Technology's revenue growth is positive but not above the United States of America market average.

Microchip Technology's earnings growth is expected to exceed the United States of America market average.

Microchip Technology's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Microchip Technology is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).


Next Steps

Past Performance

How has Microchip Technology performed over the past 5 years?

-8.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Microchip Technology's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Microchip Technology's 1-year earnings growth exceeds its 5-year average (207.8% vs -8.3%)

Microchip Technology's earnings growth has exceeded the US Semiconductor industry average in the past year (207.8% vs -6.2%).


Return on Equity

Microchip Technology has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Microchip Technology used its assets less efficiently than the US Semiconductor industry average last year based on Return on Assets.


Return on Capital Employed

Microchip Technology has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Microchip Technology's financial position?


Financial Position Analysis

Microchip Technology's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Microchip Technology's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Microchip Technology's level of debt (190.7%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (62.3% vs 190.7% today).

Debt is not well covered by operating cash flow (17.4%, less than 20% of total debt).

Interest payments on debt are not well covered by earnings (EBIT is 1.9x annual interest expense, ideally 3x coverage).


Balance Sheet

Low level of unsold assets.

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?

1.63%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Microchip Technology's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).

Microchip Technology's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are not well covered by earnings (1.1x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (4.9x coverage).


Next Steps

Management

What is the CEO of Microchip Technology's salary, the management and board of directors tenure and is there insider trading?

0.6yrs

Average management tenure


CEO

Steve Sanghi (63yo)

27.9yrs

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 for over 25 years. Mr. Sanghi is employed by Microchip since February 1 ...


CEO Compensation Analysis

Steve's remuneration is about average for companies of similar size in United States of America.

Steve's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

0.6yrs

Average Tenure

58yo

Average Age

The average tenure for the Microchip Technology management team is less than 2 years, this suggests a new team.


Board Age and Tenure

22.3yrs

Average Tenure

68yo

Average Age

The average tenure for the Microchip Technology board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$296,86314 Mar 19
L. Day
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,500
Max PriceUS$84.82
SellUS$424,24615 Feb 19
Matthew Chapman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,660
Max PriceUS$91.04
SellUS$326,86013 Feb 19
Mitchell Little
EntityIndividual
Role
Senior Key Executive
Senior VP of Worldwide Sales & Applications
Shares3,585
Max PriceUS$91.17

Ownership Breakdown


Management Team

  • Steve Sanghi (63yo)

    CEO & Chairman

    • Tenure: 27.9yrs
    • Compensation: US$12.86m
  • Mitch Little (67yo)

    Senior VP of Worldwide Sales & Applications

    • Tenure: 0.6yrs
    • Compensation: US$2.39m
  • Michael Finley

    Senior Vice President of Fab Operations

    • Tenure: 0.6yrs
  • Rich Simoncic (55yo)

    Senior Vice President of Analog Power and Interface Business Units

    • Tenure: 0.6yrs
    • Compensation: US$169.26k
  • Ganesh Moorthy (59yo)

    President & COO

    • Tenure: 3.6yrs
    • Compensation: US$5.82m
  • James Bjornholt (48yo)

    Senior VP & CFO

    • Tenure: 10.7yrs
    • Compensation: US$1.82m
  • Steve Drehobl (58yo)

    Senior Vice President of MCU8 & Technology Development Division

    • Tenure: 0.6yrs
    • Compensation: US$2.73m
  • Rami Kanama (50yo)

    Vice President of Timing & Communication Group

    • Tenure: 0yrs
  • Lauren Carr

    Senior Vice President of Global Human Resources

    • Tenure: 0.6yrs
  • Kim van Herk

    VP, General Counsel & Corporate Secretary

    • Tenure: 0yrs

Board Members

  • Steve Sanghi (63yo)

    CEO & Chairman

    • Tenure: 27.9yrs
    • Compensation: US$12.86m
  • Matt Chapman (68yo)

    Independent Director

    • Tenure: 22.3yrs
    • Compensation: US$164.64k
  • Wade Meyercord (78yo)

    Independent Director

    • Tenure: 20.3yrs
    • Compensation: US$164.64k
  • L. Day (74yo)

    Independent Director

    • Tenure: 24.8yrs
    • Compensation: US$164.64k
  • Esther Johnson (67yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$164.64k

Company Information

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


Key Information

  • Name: Microchip Technology Incorporated
  • Ticker: MCHP
  • Exchange: NasdaqGS
  • Founded: 1989
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$21.531b
  • Shares outstanding: 238.04m
  • 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
MCPDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1993
MCHPWBAG (Wiener Boerse AG)YesCommon StockATEURMar 1993
MCHP *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 1993

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 an ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/20 23:40
End of Day Share Price2019/09/20 00:00
Earnings2019/06/30
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.