Microchip Technology Inc
Exchange: NASDAQSector: TechnologyIndustry: Semiconductors
: Microchip Technology Inc. is a leading provider of smart, connected and secure embedded control and processing solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs which reduce risk while lowering total system cost and time to market. The company’s solutions serve over 100,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality.
Did you know?
Carries 7.3x more debt than cash on its balance sheet.
Current Price
$65.60
+0.34%GoodMoat Value
$10.75
83.6% overvaluedProfile
Valuation (TTM)
Market Cap$35.45B
P/E-296.68
EV$39.89B
P/B5.01
Shares Out540.45M
P/Sales6.38
Revenue$5.56B
EV/EBITDA39.29
Microchip Technology Inc (MCHP) Stock Analysis
GoodMoat Analysis
Microchip Technology Inc is a semiconductor company that currently fails the GoodMoat investment framework's initial quality gate. The business shows a negative GAAP profit and a low free cash flow yield, while its valuation appears extremely high relative to its current earnings, with a P/E of -294.7.
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Microchip Technology Inc operates in the semiconductor industry, designing and manufacturing microcontrollers, mixed-signal, analog, and Flash-IP integrated circuits. From a value investing perspective, the company's profile raises immediate concerns. Applying the GoodMoat Decision Framework, the analysis must first pass the 'Moat & Quality Gate' (Step 1). While a full Moat Score cannot be precisely calculated without deeper business analysis, the provided Quality Indicators are problematic. The company is not GAAP profitable, with an EPS of $-0.01 and a profit margin of -0.1%. Its Free Cash Flow Yield of 2.2% is below the favourable threshold of >10-15% FCF margin, and its ROE is negative at -0.1%. These metrics suggest multiple 'Weak' quality ratings, which would likely cause the analysis to stop at Step 1, deeming the business's fundamental strength insufficient for further valuation work. The valuation metrics reinforce this caution. The stock trades at a P/E of -294.7, which the framework would classify as an 'Extreme Valuation' red flag, far above reasonable norms. The GoodMoat Target price of $10.75 suggests the current price of $65.16 is considered significantly overvalued. For a value investor focused on durable competitive advantages and a margin of safety, the combination of weak current profitability, questionable quality signals, and extreme valuation multiples makes this an unfavourable candidate for deeper investigation without a substantial change in fundamentals or price. Analysis based on data as of 2024-05-15.
Market Cap$35.45B
Current Price$65.60
P/E Ratio-296.68
Forward P/E—
PEG Ratio1.85
EPS$-0.01
Book Value$13.10
P/B Ratio5.01
MCHP Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -9.9% FCF growth (CAGR)
Cash vs Debt
Net Debt: 4.9B
Revenue
5.3B
FY19
5.3B
FY20
5.4B
FY21
6.8B
FY22
8.4B
FY23
7.6B
FY24
4.4B
FY25
Net Income
356M
FY19
571M
FY20
349M
FY21
1.3B
FY22
2.2B
FY23
1.9B
FY24
—
FY25
MCHP 52-Week Range
$34.33
$80.27
50-Day MA: $71.17200-Day MA: $66.39
Did you know?
Price sits at 68% of its 52-week range.
Microchip Technology Inc (MCHP) Financial Summary
Microchip Technology Inc (MCHP) is a Technology company in the Semiconductors industry, listed on NASDAQ. The stock currently trades at $65.60 with a market capitalization of $35.45B.
Key valuation metrics include a P/E ratio of -296.68, price-to-book ratio of 5.01, and EPS of $-0.01. The company reports a profit margin of -0.1% and return on equity of -0.1%.
MCHP Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $35.45B |
| P/E Ratio | -296.68 |
| EPS | $-0.01 |
| P/B Ratio | 5.01 |
| P/S Ratio | 6.38 |
| EV/EBITDA | 39.29 |
| Dividend Yield | 2.75% |
| Profit Margin | -0.1% |
| Return on Equity | -0.1% |
| Debt/Equity | 0.80 |
MCHP Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $5.35B | $355.90M |
| FY20 | $5.27B | $570.60M |
| FY21 | $5.44B | $349.40M |
| FY22 | $6.82B | $1.29B |
| FY23 | $8.44B | $2.24B |
| FY24 | $7.63B | $1.91B |
| FY25 | $4.40B | $-500000.00 |
Microchip Technology Inc (MCHP) Valuation
Based on GoodMoat's DCF model, Microchip Technology Inc has a fair value estimate of $10.75. At the current price of $65.60, the stock appears 510.1% overvalued relative to our intrinsic value estimate.
MCHP Quality Indicators
Microchip Technology Inc maintains a profit margin of -0.1% and an operating margin of 6.7%. Return on equity stands at -0.1%. The current ratio is 2.59. Debt-to-equity ratio is 0.80.
About Microchip Technology Inc
: Microchip Technology Inc. is a leading provider of smart, connected and secure embedded control and processing solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs which reduce risk while lowering total system cost and time to market. The company’s solutions serve over 100,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality.
MCHP Free Cash Flow
Microchip Technology Inc generated $772.10M in trailing twelve-month free cash flow, representing an FCF yield of 2.18%. This moderate FCF yield indicates reasonable cash generation.
MCHP Shares Outstanding
Microchip Technology Inc has 0.54 billion shares outstanding at a share price of $65.60, giving it a market capitalization of $35.45B.
MCHP Recent Insider Trades
Recent insider transactions at Microchip Technology Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Bjornholt James Eric (SENIOR VP AND CFO) | SELL | 3,530 | $272127.70 |
| Sanghi Steve (President, CEO and Chair of Bd) | SELL | 94,869 | $7.82M |
| Krawczyk Joseph R II (SR. VP, WW CLIENT ENGAGEMENT) | SELL | 4,400 | $345743.20 |