74.71 USD
-0.76 (-1.01%)
73.55 USD
-1.16 (-1.55%)
Taking everything into account, MCHP scores 4 out of 10 in our fundamental rating. MCHP was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. MCHP has an average financial health and profitability rating. While showing a medium growth rate, MCHP is valued expensive at the moment. Finally MCHP also has an excellent dividend rating.
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.
- Of the past 5 years MCHP 4 years were profitable.
- MCHP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of MCHP (-1.69%) is comparable to the rest of the industry.
- MCHP has a Return On Equity (-3.66%) which is comparable to the rest of the industry.
- MCHP's Return On Invested Capital of 0.91% is in line compared to the rest of the industry. MCHP outperforms 49.56% of its industry peers.
- MCHP had an Average Return On Invested Capital over the past 3 years of 11.93%. This is in line with the industry average of 10.75%.
- The 3 year average ROIC (11.93%) for MCHP is well above the current ROIC(0.91%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.69% | ||
| ROE | -3.66% | ||
| ROIC | 0.91% |
ROA(3y)8.56%
ROA(5y)7.14%
ROE(3y)20.99%
ROE(5y)18.26%
ROIC(3y)11.93%
ROIC(5y)10.28%
1.3 Margins
- MCHP has a Operating Margin (3.68%) which is comparable to the rest of the industry.
- MCHP's Operating Margin has declined in the last couple of years.
- The Gross Margin of MCHP (54.06%) is better than 70.80% of its industry peers.
- In the last couple of years the Gross Margin of MCHP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.68% | ||
| PM (TTM) | N/A | ||
| GM | 54.06% |
OM growth 3Y-32.35%
OM growth 5Y-8.3%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.92%
GM growth 5Y-1.82%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MCHP is creating some value.
- Compared to 1 year ago, MCHP has more shares outstanding
- Compared to 5 years ago, MCHP has more shares outstanding
- The debt/assets ratio for MCHP has been reduced compared to a year ago.
2.2 Solvency
- MCHP has an Altman-Z score of 4.09. This indicates that MCHP is financially healthy and has little risk of bankruptcy at the moment.
- MCHP has a Altman-Z score (4.09) which is comparable to the rest of the industry.
- The Debt to FCF ratio of MCHP is 7.13, which is on the high side as it means it would take MCHP, 7.13 years of fcf income to pay off all of its debts.
- MCHP has a Debt to FCF ratio (7.13) which is in line with its industry peers.
- A Debt/Equity ratio of 0.80 indicates that MCHP is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.80, MCHP is doing worse than 80.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.13 | ||
| Altman-Z | 4.09 |
ROIC/WACC0.09
WACC10.54%
2.3 Liquidity
- MCHP has a Current Ratio of 2.25. This indicates that MCHP is financially healthy and has no problem in meeting its short term obligations.
- With a Current ratio value of 2.25, MCHP is not doing good in the industry: 69.91% of the companies in the same industry are doing better.
- A Quick Ratio of 1.20 indicates that MCHP should not have too much problems paying its short term obligations.
- MCHP's Quick ratio of 1.20 is on the low side compared to the rest of the industry. MCHP is outperformed by 81.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.25 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
- The earnings per share for MCHP have decreased strongly by -64.77% in the last year.
- The earnings per share for MCHP have been decreasing by -14.29% on average. This is quite bad
- MCHP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -23.36%.
- MCHP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.55% yearly.
EPS 1Y (TTM)-64.77%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-23.91%
Revenue 1Y (TTM)-23.36%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-2.01%
3.2 Future
- The Earnings Per Share is expected to grow by 29.55% on average over the next years. This is a very strong growth
- MCHP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.88% yearly.
EPS Next Y19.08%
EPS Next 2Y44.43%
EPS Next 3Y41.69%
EPS Next 5Y29.55%
Revenue Next Year4.39%
Revenue Next 2Y12.27%
Revenue Next 3Y14.08%
Revenue Next 5Y12.88%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 80.33, which means the current valuation is very expensive for MCHP.
- The rest of the industry has a similar Price/Earnings ratio as MCHP.
- MCHP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.21.
- MCHP is valuated quite expensively with a Price/Forward Earnings ratio of 27.55.
- 74.34% of the companies in the same industry are more expensive than MCHP, based on the Price/Forward Earnings ratio.
- MCHP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 80.33 | ||
| Fwd PE | 27.55 |
4.2 Price Multiples
- MCHP's Enterprise Value to EBITDA ratio is in line with the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCHP indicates a somewhat cheap valuation: MCHP is cheaper than 69.03% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.52 | ||
| EV/EBITDA | 52.62 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- A more expensive valuation may be justified as MCHP's earnings are expected to grow with 41.69% in the coming years.
PEG (NY)4.21
PEG (5Y)N/A
EPS Next 2Y44.43%
EPS Next 3Y41.69%
5. Dividend
5.1 Amount
- MCHP has a Yearly Dividend Yield of 2.44%.
- Compared to an average industry Dividend Yield of 0.51, MCHP pays a better dividend. On top of this MCHP pays more dividend than 94.69% of the companies listed in the same industry.
- MCHP's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
5.2 History
- The dividend of MCHP is nicely growing with an annual growth rate of 20.15%!
- MCHP has been paying a dividend for at least 10 years, so it has a reliable track record.
- MCHP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)20.15%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
- The earnings of MCHP are negative and hence is the payout ratio. MCHP will probably not be able to sustain this dividend level.
- The dividend of MCHP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-421.71%
EPS Next 2Y44.43%
EPS Next 3Y41.69%
MICROCHIP TECHNOLOGY INC / MCHP FAQ
Can you provide the ChartMill fundamental rating for MICROCHIP TECHNOLOGY INC?
ChartMill assigns a fundamental rating of 4 / 10 to MCHP.
What is the valuation status for MCHP stock?
ChartMill assigns a valuation rating of 3 / 10 to MICROCHIP TECHNOLOGY INC (MCHP). This can be considered as Overvalued.
Can you provide the profitability details for MICROCHIP TECHNOLOGY INC?
MICROCHIP TECHNOLOGY INC (MCHP) has a profitability rating of 4 / 10.
What is the valuation of MICROCHIP TECHNOLOGY INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MICROCHIP TECHNOLOGY INC (MCHP) is 80.33 and the Price/Book (PB) ratio is 6.03.
Is the dividend of MICROCHIP TECHNOLOGY INC sustainable?
The dividend rating of MICROCHIP TECHNOLOGY INC (MCHP) is 7 / 10 and the dividend payout ratio is -421.71%.