NasdaqGS:MCHP

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Executive Summary

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


Snowflake Analysis

Reasonable growth potential with proven track record 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

2.9%

MCHP

0.7%

US Semiconductor

0.7%

US Market


1 Year Return

17.6%

MCHP

50.8%

US Semiconductor

20.1%

US Market

Return vs Industry: MCHP underperformed the US Semiconductor industry which returned 43.6% over the past year.

Return vs Market: MCHP matched the US Market which returned 17.1% over the past year.


Shareholder returns

MCHPIndustryMarket
7 Day2.9%0.7%0.7%
30 Day-5.1%7.6%6.4%
90 Day22.2%23.3%20.1%
1 Year19.4%17.6%53.7%50.8%22.6%20.1%
3 Year30.9%25.0%93.6%83.3%45.1%35.7%
5 Year172.4%145.8%239.0%205.5%79.7%60.3%

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?

38.29x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCHP ($102.09) is trading above our estimate of fair value ($97.63)

Significantly Below Fair Value: MCHP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MCHP is poor value based on its PE Ratio (38.3x) compared to the US Semiconductor industry average (36x).

PE vs Market: MCHP is poor value based on its PE Ratio (38.3x) compared to the US market (19.1x).


Price to Earnings Growth Ratio

PEG Ratio: MCHP is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: MCHP is overvalued based on its PB Ratio (4.7x) compared to the US Semiconductor industry average (3.5x).


Next Steps

Future Growth

How is Microchip Technology forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

29.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCHP's forecast earnings growth (29.6% per year) is above the savings rate (2.2%).

Earnings vs Market: MCHP's earnings (29.6% per year) are forecast to grow faster than the US market (24.1% per year).

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

Revenue vs Market: MCHP's revenue (6.9% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: MCHP's revenue (6.9% 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 (25%)


Next Steps

Past Performance

How has Microchip Technology performed over the past 5 years?

15.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCHP has a large one-off loss of $66.7M impacting its June 30 2020 financial results.

Growing Profit Margin: MCHP's current net profit margins (12.2%) are higher than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: MCHP's earnings have grown by 15% per year over the past 5 years.

Accelerating Growth: MCHP's earnings growth over the past year (73.4%) exceeds its 5-year average (15% per year).

Earnings vs Industry: MCHP earnings growth over the past year (73.4%) exceeded the Semiconductor industry 1.5%.


Return on Equity

High ROE: MCHP's Return on Equity (11.7%) is considered low.


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 ($2.6B).

Long Term Liabilities: MCHP's short term assets ($2.1B) do not cover its long term liabilities ($8.9B).


Debt to Equity History and Analysis

Debt Level: MCHP's debt to equity ratio (167.8%) is considered high.

Reducing Debt: MCHP's debt to equity ratio has increased from 89.7% to 167.8% over the past 5 years.

Debt Coverage: MCHP's debt is not well covered by operating cash flow (18%).

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


Balance Sheet


Next Steps

Dividend

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

1.44%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: MCHP's dividend (1.44%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: MCHP's dividend (1.44%) is low compared to the top 25% of dividend payers in the US market (4.3%).


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 (55%), 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 (21.1% payout ratio).


Next Steps

Management

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

1.5yrs

Average management tenure


CEO

Steve Sanghi (64 yo)

28.83yrs

Tenure

US$6,883,381

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD6.88M) is below average for companies of similar size in the US market ($USD11.36M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Sanghi
CEO & Chairman28.83yrsUS$6.88m1.93%
$ 498.4m
Ganesh Moorthy
President & COO4.5yrsUS$3.04m0.12%
$ 30.8m
James Bjornholt
Senior VP & CFO11.58yrsUS$1.21m0.010%
$ 2.7m
Mitchell Little
Senior Vice President of Worldwide Client Engagement1.5yrsUS$1.32m0.0030%
$ 762.9k
Stephen Drehobl
Senior Vice President of MCU8 & MCU16 Business Units1.5yrsUS$1.49m0.0076%
$ 2.0m
Kimberly van Herk
VP, General Counsel & Corporate Secretaryno datano datano data
Rami Kanama
Vice President of Timing & Communication Groupno datano datano data
Lauren Carr
Senior Vice President of Global Human Resources1.5yrsno datano data
Michael Finley
Senior Vice President of Fab Operations1.5yrsno datano data
Richard Simoncic
Senior Vice President of Analog Power & Interface Business Units1.5yrsUS$169.26k0.020%
$ 5.2m
Mitchel Obolsky
Senior Vice President of Networking and Data Center Business Units1.5yrsno datano data
Mathew Bunker
Senior Vice President of Back-End Operations1.5yrsno datano data

1.5yrs

Average Tenure

59yo

Average Age

Experienced Management: MCHP's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Stephen Sanghi
CEO & Chairman28.83yrsUS$6.88m1.93%
$ 498.4m
Matthew Chapman
Independent Director23.25yrsUS$205.49k0.0074%
$ 1.9m
Wade Meyercord
Independent Director21.17yrsUS$205.49k0.0071%
$ 1.8m
L. Day
Independent Director25.67yrsUS$205.49k0.0035%
$ 899.5k
Esther Johnson
Independent Director6.83yrsUS$205.49k0.0032%
$ 837.6k

23.3yrs

Average Tenure

69yo

Average Age

Experienced Board: MCHP's board of directors are seasoned and experienced ( 23.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: MCHP insiders have only sold shares 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 6.1%.


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$25.773b
  • Shares outstanding: 252.45m
  • Website: https://www.microchip.com

Number of Employees


Location

  • Microchip Technology Incorporated
  • 2355 West Chandler Boulevard
  • Chandler
  • Arizona
  • 85224-6199
  • 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 an ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/13 00:13
End of Day Share Price2020/08/12 00:00
Earnings2020/06/30
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.