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Market Cap

US$40.4b

Last Updated

2021/04/15 22:00 UTC

Data Sources

Company Financials +

Executive Summary

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


Snowflake Analysis

Reasonable growth potential second-rate 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

Stable Share Price: MCHP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: MCHP's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-0.8%

MCHP

-1.0%

US Semiconductor

1.1%

US Market


1 Year Return

106.8%

MCHP

82.0%

US Semiconductor

56.6%

US Market

Return vs Industry: MCHP exceeded the US Semiconductor industry which returned 82% over the past year.

Return vs Market: MCHP exceeded the US Market which returned 56.6% over the past year.


Shareholder returns

MCHPIndustryMarket
7 Day-0.8%-1.0%1.1%
30 Day7.0%5.5%1.7%
90 Day8.0%4.8%6.0%
1 Year109.5%106.8%84.9%82.0%59.3%56.6%
3 Year97.3%88.4%116.7%105.5%62.6%52.2%
5 Year254.1%224.5%336.7%294.3%120.6%96.1%

Long-Term 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 compared to its fair value and its price relative to the market?

121.19x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCHP ($156.32) is trading below our estimate of fair value ($158.02)

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 (118.1x) compared to the US Semiconductor industry average (39.6x).

PE vs Market: MCHP is poor value based on its PE Ratio (118.1x) compared to the US market (22.3x).


Price to Earnings Growth Ratio

PEG Ratio: MCHP is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: MCHP is overvalued based on its PB Ratio (7.9x) compared to the US Semiconductor industry average (5.1x).


Future Growth

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

35.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCHP's forecast earnings growth (35.9% per year) is above the savings rate (2%).

Earnings vs Market: MCHP's earnings (35.9% per year) are forecast to grow faster than the US market (18.4% per year).

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

Revenue vs Market: MCHP's revenue (8% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: MCHP's revenue (8% 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 (21.6%)


Past Performance

How has Microchip Technology performed over the past 5 years?

21.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCHP has a large one-off loss of $241.0M impacting its December 31 2020 financial results.

Growing Profit Margin: MCHP's current net profit margins (6.3%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: MCHP's earnings have grown significantly by 21.1% per year over the past 5 years.

Accelerating Growth: MCHP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MCHP had negative earnings growth (-48.3%) over the past year, making it difficult to compare to the Semiconductor industry average (30%).


Return on Equity

High ROE: MCHP's Return on Equity (6.3%) is considered low.


Financial Health

How is Microchip Technology's financial position?


Financial Position Analysis

Short Term Liabilities: MCHP's short term assets ($2.2B) do not cover its short term liabilities ($2.5B).

Long Term Liabilities: MCHP's short term assets ($2.2B) do not cover its long term liabilities ($8.8B).


Debt to Equity History and Analysis

Debt Level: MCHP's debt to equity ratio (170.8%) is considered high.

Reducing Debt: MCHP's debt to equity ratio has increased from 113.2% to 170.8% over the past 5 years.

Debt Coverage: MCHP's debt is well covered by operating cash flow (20.3%).

Interest Coverage: MCHP's interest payments on its debt are not well covered by EBIT (2.2x coverage).


Balance Sheet


Dividend

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

0.97%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MCHP's dividend (1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.24%).

High Dividend: MCHP's dividend (1%) is low compared to the top 25% of dividend payers in the US market (3.49%).


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 high payout ratio (111.1%), MCHP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCHP's dividends in 3 years are forecast to be well covered by earnings (16.5% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Ganesh Moorthy (60 yo)

0.083

Tenure

US$3,035,780

Compensation

Mr. Ganesh Moorthy has been Chief Executive Officer of Microchip Technology Incorporated since March 1, 2021 and its Director since January 4, 2021. Mr. Moorthy has been the President at Microchip Technolo...


CEO Compensation Analysis

Compensation vs Market: Ganesh's total compensation ($USD3.04M) is below average for companies of similar size in the US market ($USD10.98M).

Compensation vs Earnings: Ganesh's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MCHP's management team is considered experienced (2.2 years average tenure).


Board Members

Experienced Board: MCHP's board of directors are seasoned and experienced ( 21.8 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 been diluted in the past year, with total shares outstanding growing by 12.4%.


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: NasdaqGS
  • Founded: 1989
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$40.394b
  • Shares outstanding: 269.26m
  • Website: https://www.microchip.com

Number of Employees


Location

  • Microchip Technology Incorporated
  • 2355 West Chandler Boulevard
  • Chandler
  • Arizona
  • 85224-6199
  • United States

Listings


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 Analysis2021/04/15 22:00
End of Day Share Price2021/04/15 00:00
Earnings2020/12/31
Annual Earnings2020/03/31


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.