MICROCHIP TECHNOLOGY INC (MCHP) Stock Fundamental Analysis
USA - NASDAQ:MCHP - US5950171042 - Common Stock
66.26 USD
+0.48 (+0.73%)
67.1226 USD
+0.86 (+1.3%)
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. While showing a medium growth rate, MCHP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
MCHP had positive earnings in the past year.
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
MCHP has a Return On Assets of -1.21%. This is comparable to the rest of the industry: MCHP outperforms 43.75% of its industry peers.
MCHP has a Return On Equity (-2.63%) which is comparable to the rest of the industry.
With a Return On Invested Capital value of 1.19%, MCHP perfoms like the industry average, outperforming 49.11% of the companies in the same industry.
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 10.87%.
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
The Operating Margin of MCHP (4.91%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MCHP has declined.
MCHP has a Gross Margin of 54.48%. This is in the better half of the industry: MCHP outperforms 71.43% of its industry peers.
MCHP's Gross Margin has declined in the last couple of years.
| 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
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 3.59. This indicates that MCHP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.59, MCHP is in line with its industry, outperforming 50.89% of the companies in the same industry.
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 has a Debt to FCF ratio of 7.52. This is comparable to the rest of the industry: MCHP outperforms 50.89% of 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 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 7.52 | ||
| Altman-Z | 3.59 |
ROIC/WACC0.11
WACC11.02%
2.3 Liquidity
MCHP has a Current Ratio of 2.31. This indicates that MCHP is financially healthy and has no problem in meeting its short term obligations.
MCHP has a worse Current ratio (2.31) than 68.75% 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 amonst the worse of the industry: MCHP underperforms 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
MCHP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -72.63%.
Measured over the past years, MCHP shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -14.29% on average per year.
MCHP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -35.70%.
MCHP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.55% yearly.
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
Based on estimates for the next years, MCHP will show a very strong growth in Earnings Per Share. The EPS will grow by 29.71% on average per year.
MCHP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.04% yearly.
EPS Next Y16.65%
EPS Next 2Y43.41%
EPS Next 3Y37.94%
EPS Next 5Y29.71%
Revenue Next Year5.46%
Revenue Next 2Y12.91%
Revenue Next 3Y14.64%
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 63.71, which means the current valuation is very expensive for MCHP.
Compared to the rest of the industry, the Price/Earnings ratio of MCHP is on the same level as its industry peers.
MCHP is valuated expensively when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
MCHP is valuated rather expensively with a Price/Forward Earnings ratio of 24.78.
Based on the Price/Forward Earnings ratio, MCHP is valued a bit cheaper than the industry average as 67.86% of the companies are valued more expensively.
MCHP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.71 | ||
| Fwd PE | 24.78 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCHP is on the same level as its industry peers.
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 | 49.28 | ||
| EV/EBITDA | 42.94 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCHP does not grow enough to justify the current Price/Earnings ratio.
MCHP's earnings are expected to grow with 37.94% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.83
PEG (5Y)N/A
EPS Next 2Y43.41%
EPS Next 3Y37.94%
5. Dividend
5.1 Amount
MCHP has a Yearly Dividend Yield of 2.80%.
Compared to an average industry Dividend Yield of 2.31, MCHP pays a better dividend. On top of this MCHP pays more dividend than 92.86% of the companies listed in the same industry.
MCHP's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.8% |
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 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 2Y43.41%
EPS Next 3Y37.94%
66.26
+0.48 (+0.73%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners100.81%
Inst Owner Change4.5%
Ins Owners1.93%
Ins Owner Change1.71%
Market Cap35.76B
Analysts80
Price Target78.68 (18.74%)
Short Float %3.97%
Short Ratio2.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.8% |
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)2.96%
PT rev (3m)21.23%
EPS NQ rev (1m)1.5%
EPS NQ rev (3m)25.23%
EPS NY rev (1m)6.26%
EPS NY rev (3m)11.99%
Revenue NQ rev (1m)0.26%
Revenue NQ rev (3m)5.36%
Revenue NY rev (1m)0.4%
Revenue NY rev (3m)1.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.71 | ||
| Fwd PE | 24.78 | ||
| P/S | 8.44 | ||
| P/FCF | 49.28 | ||
| P/OCF | 44.89 | ||
| P/B | 5.21 | ||
| P/tB | N/A | ||
| EV/EBITDA | 42.94 |
EPS(TTM)1.04
EY1.57%
EPS(NY)2.67
Fwd EY4.03%
FCF(TTM)1.34
FCFY2.03%
OCF(TTM)1.48
OCFY2.23%
SpS7.85
BVpS12.71
TBVpS-3.95
PEG (NY)3.83
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 | 3.59 |
F-Score4
WACC11.02%
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 Y16.65%
EPS Next 2Y43.41%
EPS Next 3Y37.94%
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 Year5.46%
Revenue Next 2Y12.91%
Revenue Next 3Y14.64%
Revenue Next 5Y10.04%
EBIT growth 1Y-88.9%
EBIT growth 3Y-41.54%
EBIT growth 5Y-11.55%
EBIT Next Year54.31%
EBIT Next 3Y33.49%
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%