MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
USA - NASDAQ:MCHP - US5950171042 - Common Stock
67.52 USD
+0.45 (+0.67%)
67.52 USD
0 (0%)
Taking everything into account, MCHP scores 4 out of 10 in our fundamental rating. MCHP was compared to 112 industry peers in the Semiconductors & Semiconductor Equipment industry. MCHP has an average financial health and profitability rating. MCHP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCHP was profitable.
MCHP had a positive operating cash flow in the past year.
Of the past 5 years MCHP 4 years were profitable.
Each year in the past 5 years MCHP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -1.21%, MCHP is in line with its industry, outperforming 42.86% of the companies in the same industry.
MCHP has a Return On Equity of -2.63%. This is comparable to the rest of the industry: MCHP outperforms 41.96% of its industry peers.
MCHP's Return On Invested Capital of 1.19% is in line compared to the rest of the industry. MCHP outperforms 49.11% 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 10.98%.
The 3 year average ROIC (11.93%) for MCHP is well above the current ROIC(1.19%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.21% | ||
| ROE | -2.63% | ||
| ROIC | 1.19% |
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 (4.91%) which is in line with its industry peers.
MCHP's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 54.48%, MCHP is doing good in the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Gross Margin of MCHP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.91% | ||
| PM (TTM) | N/A | ||
| GM | 54.48% |
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
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 more shares outstanding
The number of shares outstanding for MCHP has been increased compared to 5 years ago.
MCHP has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.64 indicates that MCHP is not in any danger for bankruptcy at the moment.
MCHP has a Altman-Z score (3.64) which is in line with its industry peers.
The Debt to FCF ratio of MCHP is 7.52, which is on the high side as it means it would take MCHP, 7.52 years of fcf income to pay off all of its debts.
MCHP's Debt to FCF ratio of 7.52 is in line compared to the rest of the industry. MCHP outperforms 52.68% of its industry peers.
MCHP has a Debt/Equity ratio of 0.80. This is a neutral value indicating 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 80.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Altman-Z | 3.64 |
ROIC/WACC0.11
WACC11.25%
2.3 Liquidity
A Current Ratio of 2.31 indicates that MCHP has no problem at all paying its short term obligations.
MCHP has a worse Current ratio (2.31) than 66.96% of its industry peers.
MCHP has a Quick Ratio of 1.33. This is a normal value and indicates that MCHP is financially healthy and should not expect problems in meeting its short term obligations.
MCHP has a Quick ratio of 1.33. This is in the lower half of the industry: MCHP underperforms 79.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The earnings per share for MCHP have decreased strongly by -72.63% in the last year.
MCHP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -14.29% yearly.
The Revenue for MCHP has decreased by -35.70% in the past year. This is quite bad
The Revenue has been decreasing by -3.55% on average over the past years.
EPS 1Y (TTM)-72.63%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-49.06%
Revenue 1Y (TTM)-35.7%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-13.36%
3.2 Future
The Earnings Per Share is expected to grow by 29.71% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.04% on average over the next years. This is quite good.
EPS Next Y16.62%
EPS Next 2Y43.36%
EPS Next 3Y38.15%
EPS Next 5Y29.71%
Revenue Next Year5.44%
Revenue Next 2Y12.92%
Revenue Next 3Y14.45%
Revenue Next 5Y10.04%
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 64.92, which means the current valuation is very expensive for MCHP.
The rest of the industry has a similar Price/Earnings ratio as MCHP.
When comparing the Price/Earnings ratio of MCHP to the average of the S&P500 Index (27.69), we can say MCHP is valued expensively.
MCHP is valuated quite expensively with a Price/Forward Earnings ratio of 25.27.
Based on the Price/Forward Earnings ratio, MCHP is valued a bit cheaper than 74.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.18, MCHP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.92 | ||
| Fwd PE | 25.27 |
4.2 Price Multiples
MCHP's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, MCHP is valued a bit cheaper than 66.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.22 | ||
| EV/EBITDA | 43.68 |
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 38.15% in the coming years.
PEG (NY)3.91
PEG (5Y)N/A
EPS Next 2Y43.36%
EPS Next 3Y38.15%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.79%, MCHP has a reasonable but not impressive dividend return.
MCHP's Dividend Yield is rather good when compared to the industry average which is at 2.13. MCHP pays more dividend than 93.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, MCHP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
On average, the dividend of MCHP grows each year by 20.15%, which is quite nice.
MCHP has been paying a dividend for at least 10 years, so it has a reliable track record.
MCHP has not decreased their dividend for at least 10 years, which is a reliable track record.
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-555.76%
EPS Next 2Y43.36%
EPS Next 3Y38.15%
67.52
+0.45 (+0.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners104.37%
Inst Owner Change0.49%
Ins Owners1.93%
Ins Owner Change1.71%
Market Cap36.44B
Analysts79.39
Price Target77.7 (15.08%)
Short Float %4.26%
Short Ratio2.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend1.81
Dividend Growth(5Y)20.15%
DP-555.76%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.2%
Min EPS beat(2)2.6%
Max EPS beat(2)11.8%
EPS beat(4)3
Avg EPS beat(4)-2.11%
Min EPS beat(4)-27.71%
Max EPS beat(4)11.8%
EPS beat(8)4
Avg EPS beat(8)-1.35%
EPS beat(12)4
Avg EPS beat(12)-1.31%
EPS beat(16)6
Avg EPS beat(16)-0.69%
Revenue beat(2)0
Avg Revenue beat(2)-0.61%
Min Revenue beat(2)-1.17%
Max Revenue beat(2)-0.05%
Revenue beat(4)0
Avg Revenue beat(4)-1.73%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)-0.05%
Revenue beat(8)0
Avg Revenue beat(8)-2%
Revenue beat(12)0
Avg Revenue beat(12)-1.83%
Revenue beat(16)0
Avg Revenue beat(16)-1.7%
PT rev (1m)-1.25%
PT rev (3m)15.08%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)8.48%
EPS NY rev (1m)0%
EPS NY rev (3m)6.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.13%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.92 | ||
| Fwd PE | 25.27 | ||
| P/S | 8.6 | ||
| P/FCF | 50.22 | ||
| P/OCF | 45.74 | ||
| P/B | 5.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 43.68 |
EPS(TTM)1.04
EY1.54%
EPS(NY)2.67
Fwd EY3.96%
FCF(TTM)1.34
FCFY1.99%
OCF(TTM)1.48
OCFY2.19%
SpS7.85
BVpS12.71
TBVpS-3.95
PEG (NY)3.91
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.21% | ||
| ROE | -2.63% | ||
| ROCE | 1.51% | ||
| ROIC | 1.19% | ||
| ROICexc | 1.24% | ||
| ROICexgc | 3.88% | ||
| OM | 4.91% | ||
| PM (TTM) | N/A | ||
| GM | 54.48% | ||
| FCFM | 17.13% |
ROA(3y)8.56%
ROA(5y)7.14%
ROE(3y)20.99%
ROE(5y)18.26%
ROIC(3y)11.93%
ROIC(5y)10.28%
ROICexc(3y)12.2%
ROICexc(5y)10.52%
ROICexgc(3y)48.65%
ROICexgc(5y)43.88%
ROCE(3y)15.1%
ROCE(5y)13.02%
ROICexcg growth 3Y-44.39%
ROICexcg growth 5Y-17.88%
ROICexc growth 3Y-40.07%
ROICexc growth 5Y-9.14%
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%
F-Score4
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Debt/EBITDA | 5.8 | ||
| Cap/Depr | 9.69% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.69% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 3.64 |
F-Score4
WACC11.25%
ROIC/WACC0.11
Cap/Depr(3y)32.64%
Cap/Depr(5y)27.66%
Cap/Sales(3y)4.12%
Cap/Sales(5y)3.9%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-72.63%
EPS 3Y-34.42%
EPS 5Y-14.29%
EPS Q2Q%-49.06%
EPS Next Y16.62%
EPS Next 2Y43.36%
EPS Next 3Y38.15%
EPS Next 5Y29.71%
Revenue 1Y (TTM)-35.7%
Revenue growth 3Y-13.58%
Revenue growth 5Y-3.55%
Sales Q2Q%-13.36%
Revenue Next Year5.44%
Revenue Next 2Y12.92%
Revenue Next 3Y14.45%
Revenue Next 5Y10.04%
EBIT growth 1Y-88.9%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year72.2%
EBIT Next 3Y31.33%
EBIT Next 5Y25.08%
FCF growth 1Y-78%
FCF growth 3Y-32.16%
FCF growth 5Y-12.16%
OCF growth 1Y-78.89%
OCF growth 3Y-31.89%
OCF growth 5Y-10.27%