Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications in the Americas, Europe, and Asia. More Details
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Reasonable growth potential second-rate dividend payer.
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 +/- 4% a week.
Volatility Over Time: MCHP's weekly volatility (4%) has been stable over the past year.
7 Day Return
1 Year Return
Return vs Industry: MCHP underperformed the US Semiconductor industry which returned 55.5% over the past year.
Return vs Market: MCHP exceeded the US Market which returned 35.9% over the past year.
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
4 days ago | Simply Wall StMicrochip Technology Incorporated (NASDAQ:MCHP) Shares Could Be 23% Below Their Intrinsic Value Estimate
3 weeks ago | Simply Wall StMicrochip Technology (NASDAQ:MCHP) Has Gifted Shareholders With A Fantastic 186% Total Return On Their Investment
1 month ago | Simply Wall StMicrochip Technology (NASDAQ:MCHP) Has A Pretty Healthy Balance Sheet
Is Microchip Technology undervalued compared to its fair value and its price relative to the market?
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: MCHP ($143.12) is trading below our estimate of fair value ($181.28)
Significantly Below Fair Value: MCHP is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: MCHP is poor value based on its PE Ratio (106.3x) compared to the US Semiconductor industry average (34.6x).
PE vs Market: MCHP is poor value based on its PE Ratio (106.3x) compared to the US market (18x).
Price to Earnings Growth Ratio
PEG Ratio: MCHP is poor value based on its PEG Ratio (3.7x)
Price to Book Ratio
PB vs Industry: MCHP is overvalued based on its PB Ratio (7.3x) compared to the US Semiconductor industry average (4.7x).
How is Microchip Technology forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: MCHP's forecast earnings growth (28.5% per year) is above the savings rate (2%).
Earnings vs Market: MCHP's earnings (28.5% per year) are forecast to grow faster than the US market (14.9% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: MCHP's revenue (7.9% per year) is forecast to grow slower than the US market (9.2% per year).
High Growth Revenue: MCHP's revenue (7.9% 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 (27.6%)
How has Microchip Technology performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: MCHP has a large one-off loss of $301.3M impacting its March 31 2021 financial results.
Growing Profit Margin: MCHP's current net profit margins (6.4%) are lower than last year (10.8%).
Past Earnings Growth Analysis
Earnings Trend: MCHP's earnings have grown significantly by 21.7% 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 (-38.8%) over the past year, making it difficult to compare to the Semiconductor industry average (55.6%).
Return on Equity
High ROE: MCHP's Return on Equity (6.5%) is considered low.
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 ($2.4B).
Long Term Liabilities: MCHP's short term assets ($2.1B) do not cover its long term liabilities ($8.7B).
Debt to Equity History and Analysis
Debt Level: MCHP's debt to equity ratio (166.8%) is considered high.
Reducing Debt: MCHP's debt to equity ratio has increased from 114.3% to 166.8% over the past 5 years.
Debt Coverage: MCHP's debt is well covered by operating cash flow (21.5%).
Interest Coverage: MCHP's interest payments on its debt are not well covered by EBIT (2.8x coverage).
What is Microchip Technology current dividend yield, its reliability and sustainability?
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: MCHP's dividend (1.15%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.31%).
High Dividend: MCHP's dividend (1.15%) is low compared to the top 25% of dividend payers in the US market (3.54%).
Stability and Growth of Payments
Stable Dividend: MCHP's dividends per share have been stable in the past 10 years.
Growing Dividend: MCHP's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its high payout ratio (111%), MCHP's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: MCHP's dividends in 3 years are forecast to be well covered by earnings (19.8% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Ganesh Moorthy (61 yo)
Mr. Ganesh Moorthy has been Chief Executive Officer of Microchip Technology Incorporated since March 1, 2021 and its Director since January 4, 2021. Mr. Moorthy has been the President at Microchip Technolo...
CEO Compensation Analysis
Compensation vs Market: Ganesh's total compensation ($USD3.89M) is below average for companies of similar size in the US market ($USD11.17M).
Compensation vs Earnings: Ganesh's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Experienced Management: MCHP's management team is considered experienced (2.3 years average tenure).
Experienced Board: MCHP's board of directors are seasoned and experienced ( 14.9 years average tenure).
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
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.6%.
Microchip Technology Incorporated's company bio, employee growth, exchange listings and data sources
- Name: Microchip Technology Incorporated
- Ticker: MCHP
- Exchange: NasdaqGS
- Founded: 1989
- Industry: Semiconductors
- Sector: Semiconductors
- Market Cap: US$39.221b
- Shares outstanding: 274.04m
- Website: https://www.microchip.com
Number of Employees
- Microchip Technology Incorporated
- 2355 West Chandler Boulevard
- United States
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 8-...
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/07/31 05:26|
|End of Day Share Price||2021/07/30 00:00|
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.