Microchip Technology Inc

Technology
Semiconductors
www.microchip.com

Earnings Score
Moat Score
Safety Score

Market Cap $25.42B
PE -17
Debt $6.79B
Cash $586.00M
EV $31.62B
FCF -$1.34B

Earnings

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Sales & Net Margins

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Earnings	-$1.47B
EBIT	-$1.70B
ROE	-24%
ROA	-11%
FCF	-$1.34B
Equity	$6.03B
Growth Stability	100%
PE	-17.31
PEG	-2.58
PB	4.21
P/FCF	-18.92
P/S	-15.54
Price/Cash	0.02
Debt/Equity	1.13
Debt/FCF	-5.05
Net Margins	4%
Gross Margins	92%
Op. Margins	104%
Earnings CAGR	9%
Sales CAGR	4%
FCF CAGR	6%
Equity CAGR	7%
Earnings Stability	-0.04
Earnings CAGR 5Y	7%

Sales CAGR 5Y	14%
FCF CAGR 5Y	1%
Equity CAGR 5Y	3%
Earnings CAGR 3Y	-5%
Sales CAGR 3Y	-5%
FCF CAGR 3Y	-11%
Equity CAGR 3Y	1%
Market Cap	$25.42B
Revenue	-$1.64B
Assets	$15.63B
Total Debt	$6.79B
Cash	$586.00M
Shares Outstanding	536.9M
EV	31.62B
Earnings Score	6%
Moat Score	28%
Safety Score	65%
Final Score	33%
Working Capital	1.67B
Current Ratio	2.25
Gross Profit	-$1.50B
Shares Growth 3y	-1%
Equity Growth YoY	-15%

Assets & ROA

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Stockholders Equity & ROE

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Microchip became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.

SEC Filings

Direct access to Microchip Technology Inc (MCHP) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-K Mar 31
2023
- 10-Q Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-K Mar 31
2022
- 10-Q Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-K Mar 31

Sector Comparison

How does Microchip Technology Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Microchip Technology Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 9%

Stability -4%

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Microchip Technology Inc Discounted Cash Flow

Fully customizable DCF calculator online for Microchip Technology Inc.

Years

Calculation mode

= -$20B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	-$1.3B	-$1.4B	-$1.5B	-$1.6B	-$1.7B	-$1.8B	-$1.9B	-$2B	-$2.1B	-$2.2B	-$2.3B	-$23B
DCF		-$1.3B	-$1.2B	-$1.2B	-$1.1B	-$1.1B	-$1.1B	-$1B	-$975M	-$936M	-$900M	-$9B
Value	-$20B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	03/2016	09/2016	03/2017	09/2017	03/2018	03/2019	03/2020	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Net Margins	15%	-	5%	-	6%	7%	11%	-	-	-	-	-	4%
ROA	-	-	4%	-	11%	4%	4%	-	-	-	-	-	-11%
ROE	-	-	5%	-	8%	7%	10%	-	-	-	-	-	-24%

Bad Net Margins (4.49%)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	03/2016	09/2016	03/2017	09/2017	03/2018	03/2019	03/2020	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Debt over FCF	-	-	4.64	-	4.78	9	7.61	-	-	-	-	-	-5.05
Debt over Equity	1.56	-	1.4	-	1.77	2.46	2.01	-	-	-	-	-	1.13
Growth Stability	-	-	-	-	100%	100%	100%	-	-	-	-	-	100%

Good Debt/FCF ratio (-5.05)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Neutral Debt/Equity ratio (1.13)

The company has a balance between equity and debt that is not too good nor too bad.

Good Graham’s Stability (100%)

The company has a good stability in its earnings, which is a sign of a good competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	03/2016	09/2016	03/2017	09/2017	03/2018	03/2019	03/2020	12/2020	12/2021	12/2022	12/2023	12/2024	CAGR 5Y
Revenue YoY growth	-	-	-	-	-	34%	-1%	-	-	-	-	-	14%
Earnings YoY growth	-	-	-	-	-	39%	60%	-	-	-	-	-	7%
Equity YoY growth	-	-	-	-	-	61%	6%	-	-	-	-	-	3%
FCF YoY growth	-	-	-	-	-	19%	2%	-	-	-	-	-	1%