MICROCHIP TECHNOLOGY INC (MCHP)
US5950171042 - Common Stock
MCHP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 108 industry peers in the Semiconductors & Semiconductor Equipment industry. While MCHP has a great profitability rating, there are some minor concerns on its financial health. MCHP has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year MCHP was profitable.
In the past year MCHP had a positive cash flow from operations.
In the past 5 years MCHP has always been profitable.
MCHP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of MCHP (5.00%) is better than 63.89% of its industry peers.
Looking at the Return On Equity, with a value of 12.45%, MCHP is in the better half of the industry, outperforming 74.07% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.26%, MCHP is doing good in the industry, outperforming 73.15% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MCHP is above the industry average of 11.13%.
The last Return On Invested Capital (7.26%) for MCHP is well below the 3 year average (14.53%), which needs to be investigated, but indicates that MCHP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5% | ||
| ROE | 12.45% | ||
| ROIC | 7.26% |
ROA(3y)11.21%
ROA(5y)7.8%
ROE(3y)28.27%
ROE(5y)20.31%
ROIC(3y)14.53%
ROIC(5y)10.53%
1.3 Margins
MCHP has a Profit Margin of 14.22%. This is in the better half of the industry: MCHP outperforms 68.52% of its industry peers.
MCHP's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 20.68%, MCHP is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
MCHP's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 60.32%, MCHP belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
MCHP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.68% | ||
| PM (TTM) | 14.22% | ||
| GM | 60.32% |
OM growth 3Y22.16%
OM growth 5Y19.11%
PM growth 3Y57.24%
PM growth 5Y30.29%
GM growth 3Y1.74%
GM growth 5Y3.61%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MCHP is still creating some value.
Compared to 1 year ago, MCHP has less shares outstanding
MCHP has more shares outstanding than it did 5 years ago.
MCHP has a better debt/assets ratio than last year.
2.2 Solvency
MCHP has an Altman-Z score of 3.06. This indicates that MCHP is financially healthy and has little risk of bankruptcy at the moment.
MCHP has a Altman-Z score (3.06) which is in line with its industry peers.
The Debt to FCF ratio of MCHP is 4.25, which is a neutral value as it means it would take MCHP, 4.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MCHP (4.25) is better than 60.19% of its industry peers.
A Debt/Equity ratio of 0.71 indicates that MCHP is somewhat dependend on debt financing.
MCHP has a worse Debt to Equity ratio (0.71) than 80.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 4.25 | ||
| Altman-Z | 3.06 |
ROIC/WACC0.53
WACC13.75%
2.3 Liquidity
A Current Ratio of 0.88 indicates that MCHP may have some problems paying its short term obligations.
MCHP's Current ratio of 0.88 is on the low side compared to the rest of the industry. MCHP is outperformed by 91.67% of its industry peers.
A Quick Ratio of 0.48 indicates that MCHP may have some problems paying its short term obligations.
With a Quick ratio value of 0.48, MCHP is not doing good in the industry: 93.52% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
MCHP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -59.13%.
MCHP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.40% yearly.
Looking at the last year, MCHP shows a very negative growth in Revenue. The Revenue has decreased by -38.55% in the last year.
Measured over the past years, MCHP shows a small growth in Revenue. The Revenue has been growing by 7.37% on average per year.
EPS 1Y (TTM)-59.13%
EPS 3Y14.22%
EPS 5Y8.4%
EPS Q2Q%-71.6%
Revenue 1Y (TTM)-38.55%
Revenue growth 3Y11.97%
Revenue growth 5Y7.37%
Sales Q2Q%-48.37%
3.2 Future
Based on estimates for the next years, MCHP will show a small growth in Earnings Per Share. The EPS will grow by 3.26% on average per year.
MCHP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.76% yearly.
EPS Next Y-66.64%
EPS Next 2Y-28.69%
EPS Next 3Y-7.06%
EPS Next 5Y3.26%
Revenue Next Year-40.47%
Revenue Next 2Y-16.6%
Revenue Next 3Y-4.6%
Revenue Next 5Y3.76%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
MCHP is valuated rather expensively with a Price/Earnings ratio of 21.03.
Based on the Price/Earnings ratio, MCHP is valued a bit cheaper than the industry average as 78.70% of the companies are valued more expensively.
MCHP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.20, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 22.23, MCHP is valued on the expensive side.
MCHP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MCHP is cheaper than 71.30% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.73. MCHP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 22.23 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCHP indicates a somewhat cheap valuation: MCHP is cheaper than 74.07% of the companies listed in the same industry.
MCHP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MCHP is cheaper than 87.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.73 | ||
| EV/EBITDA | 18.43 |
4.3 Compensation for Growth
MCHP has an outstanding profitability rating, which may justify a higher PE ratio.
MCHP's earnings are expected to decrease with -7.06% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.5
EPS Next 2Y-28.69%
EPS Next 3Y-7.06%
5. Dividend
5.1 Amount
MCHP has a Yearly Dividend Yield of 3.25%. Purely for dividend investing, there may be better candidates out there.
The stock price of MCHP dropped by -27.92% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 2.33, MCHP pays a better dividend. On top of this MCHP pays more dividend than 94.44% of the companies listed in the same industry.
MCHP's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
5.2 History
On average, the dividend of MCHP grows each year by 18.25%, which is quite nice.
MCHP has paid a dividend for at least 10 years, which is a reliable track record.
MCHP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)18.25%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
123.62% of the earnings are spent on dividend by MCHP. This is not a sustainable payout ratio.
MCHP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP123.62%
EPS Next 2Y-28.69%
EPS Next 3Y-7.06%
MICROCHIP TECHNOLOGY INC
NASDAQ:MCHP (12/20/2024, 8:23:44 PM)
Premarket: 55.85 +0.34 (+0.61%)55.51
-0.48 (-0.86%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners97.19%
Inst Owner Change1.91%
Ins Owners2.07%
Ins Owner Change6.28%
Market Cap29.81B
Analysts79.35
Price Target86.72 (56.22%)
Short Float %5.72%
Short Ratio4.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
Dividend Growth(5Y)18.25%
DP123.62%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.42%
Min EPS beat(2)-0.01%
Max EPS beat(2)4.85%
EPS beat(4)2
Avg EPS beat(4)1.04%
Min EPS beat(4)-2.65%
Max EPS beat(4)4.85%
EPS beat(8)2
Avg EPS beat(8)-0.21%
EPS beat(12)4
Avg EPS beat(12)0.28%
EPS beat(16)7
Avg EPS beat(16)0.54%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-2.39%
Max Revenue beat(4)-0.95%
Revenue beat(8)0
Avg Revenue beat(8)-1.87%
Revenue beat(12)0
Avg Revenue beat(12)-1.62%
Revenue beat(16)0
Avg Revenue beat(16)-1.61%
PT rev (1m)-7.69%
PT rev (3m)-9.95%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-62.61%
EPS NY rev (1m)-2.93%
EPS NY rev (3m)-19.51%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-31.2%
Revenue NY rev (1m)-1.05%
Revenue NY rev (3m)-7.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 22.23 | ||
| P/S | 5.42 | ||
| P/FCF | 19.73 | ||
| P/OCF | 17.49 | ||
| P/B | 4.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.43 |
EPS(TTM)2.64
EY4.76%
EPS(NY)2.5
Fwd EY4.5%
FCF(TTM)2.81
FCFY5.07%
OCF(TTM)3.17
OCFY5.72%
SpS10.24
BVpS11.69
TBVpS-5.7
PEG (NY)N/A
PEG (5Y)2.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5% | ||
| ROE | 12.45% | ||
| ROCE | 9.22% | ||
| ROIC | 7.26% | ||
| ROICexc | 7.43% | ||
| ROICexgc | 32.99% | ||
| OM | 20.68% | ||
| PM (TTM) | 14.22% | ||
| GM | 60.32% | ||
| FCFM | 27.48% |
ROA(3y)11.21%
ROA(5y)7.8%
ROE(3y)28.27%
ROE(5y)20.31%
ROIC(3y)14.53%
ROIC(5y)10.53%
ROICexc(3y)14.84%
ROICexc(5y)10.75%
ROICexgc(3y)59.35%
ROICexgc(5y)46.01%
ROCE(3y)18.45%
ROCE(5y)13.37%
ROICexcg growth 3Y18.42%
ROICexcg growth 5Y15.98%
ROICexc growth 3Y39.37%
ROICexc growth 5Y32.47%
OM growth 3Y22.16%
OM growth 5Y19.11%
PM growth 3Y57.24%
PM growth 5Y30.29%
GM growth 3Y1.74%
GM growth 5Y3.61%
F-Score4
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 4.25 | ||
| Debt/EBITDA | 2.29 | ||
| Cap/Depr | 23.75% | ||
| Cap/Sales | 3.52% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.35% | ||
| Profit Quality | 193.28% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z | 3.06 |
F-Score4
WACC13.75%
ROIC/WACC0.53
Cap/Depr(3y)37.83%
Cap/Depr(5y)25.41%
Cap/Sales(3y)4.97%
Cap/Sales(5y)3.58%
Profit Quality(3y)156.39%
Profit Quality(5y)249.98%
High Growth Momentum
Growth
EPS 1Y (TTM)-59.13%
EPS 3Y14.22%
EPS 5Y8.4%
EPS Q2Q%-71.6%
EPS Next Y-66.64%
EPS Next 2Y-28.69%
EPS Next 3Y-7.06%
EPS Next 5Y3.26%
Revenue 1Y (TTM)-38.55%
Revenue growth 3Y11.97%
Revenue growth 5Y7.37%
Sales Q2Q%-48.37%
Revenue Next Year-40.47%
Revenue Next 2Y-16.6%
Revenue Next 3Y-4.6%
Revenue Next 5Y3.76%
EBIT growth 1Y-67.14%
EBIT growth 3Y36.78%
EBIT growth 5Y27.89%
EBIT Next Year-50.04%
EBIT Next 3Y-7.82%
EBIT Next 5Y6.3%
FCF growth 1Y-45.99%
FCF growth 3Y12.65%
FCF growth 5Y12.52%
OCF growth 1Y-47.32%
OCF growth 3Y14.71%
OCF growth 5Y11.55%