Microchip Technology Inc
MCHP
Semiconductors & Related Devices
Mkt Cap
$44.52BPE
17.68Debt
$7.76BCash
$256.6MEV
$52.02BFCF
$3.157BP/E Ratio
17.68Debt
$7.76BCash
$256.6MEV
$52.02BFCF
$3.157BMicrochip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. The company offers general purpose 8-bit, 16-bit, and 32-bit microcontrollers; 32-bit embedded microprocessors markets; and specialized microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human machine interface, security, wired connectivity, and wireless connectivity applications. It also provides development tools that enable system designers to program microcontroller and microprocessor products for specific applications; field-programmable gate array (FPGA) products; and analog, interface, mixed signal, and timing products comprising power management, linear, mixed-signal, high-voltage, thermal management, discrete diodes and metal oxide semiconductor field effect transistors (MOSFETS), radio frequency (RF), drivers, safety, security, timing, USB, Ethernet, wireless, and other interface products. In addition, the company offers memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random access memories, and serial electrically erasable random access memories for the production of very small footprint devices; and licenses its SuperFlash embedded flash and NVM technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate array, RF, analog, and neuromorphic compute products that require embedded non-volatile memory, as well as provides engineering services. Further, it offers wafer foundry and assembly, and test subcontracting manufacturing services; and timing systems products, application specific integrated circuits, and aerospace products. Microchip Technology Incorporated was incorporated in 1989 and is headquartered in Chandler, Arizona.
Sector
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DCF
Discounted Cash Flow Valuation of Microchip Technology Inc
Value
Growth
%
%
Discount
%
%
Multiple
| g\r | +10% | +11% | +12% | +13% | +14% |
|---|---|---|---|---|---|
| 0% | 10 | 9 | 8 | 8 | 7 |
| +1% | 11 | 10 | 9 | 8 | 8 |
| +2% | 13 | 11 | 10 | 9 | 8 |
| +3% | 14 | 13 | 11 | 10 | 9 |
| +4% | 17 | 14 | 12 | 11 | 10 |
| Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FCF | $3.157B | $3.867B | $4.661B | $5.527B | $6.448B | $7.396B | $8.34B | $9.243B | $10.06B | $10.76B | $11.3B | $113B |
| DCF | $3.363B | $3.524B | $3.634B | $3.686B | $3.677B | $3.606B | $3.475B | $3.29B | $3.059B | $2.793B | $27.93B | |
| Value | $62.04B | |||||||||||
In the chart Earnings are multiplied by this value.
Earnings Growth 31%
Earnings Stability 47%
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 | 03-2015 | 03-2016 | 03-2017 | 03-2018 | 03-2019 | 03-2020 | 03-2021 | 03-2022 | 03-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Margin | 17% | 15% | 4.8% | 6.4% | 6.7% | 11% | 6.4% | 19% | 27% | 28% |
| ROA | 8.9% | 6.3% | 3.6% | 11% | 3.9% | 3.7% | 6.1% | 11% | 19% | 21% |
| ROE | 18% | 15% | 5% | 7.8% | 6.7% | 10% | 6.5% | 22% | 34% | 36% |
What is the average Net Margin?
The average Net Margin over the past 5 years is +12.61%.
What is the trend of Net Margin?
The trend of Net Margin over the past 5 years is +3.79%.
What is the average Return on Assets (ROA)?
The average ROA over the past 5 years is +9.24%.
What is the trend of Return on Assets (ROA)?
The trend of ROA over the past 5 years is +1.81%.
What is the average Return on Equity (ROE)?
The average ROE over the past 5 years is +14.57%.
What is the trend of Return on Equity (ROE)?
The trend of ROE over the past 5 years is +4.98%.
Safety & Stabiliy
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 | 03-2015 | 03-2016 | 03-2017 | 03-2018 | 03-2019 | 03-2020 | 03-2021 | 03-2022 | 03-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt FCF | 2.05 | 5.18 | 4.64 | 4.78 | 9.00 | 7.61 | 5.77 | 3.17 | 2.51 | 2.46 |
| Debt Equity | 0.57 | 1.56 | 1.40 | 1.77 | 2.46 | 2.01 | 1.97 | 1.33 | 1.21 | 1.11 |
| MIN | ||||||||||
| Graham Stability | - | - | 46% | 90% | 100% | 100% | 89% | 100% | 100% | 46% |
What is the Debt/FCF?
The Debt/FCF trailing twelve month is 2.46.
What is the trend of Debt/FCF?
The trend of Debt/FCF over the past 5 years is -0.88.
What is the Graham’s Stability?
Graham’s Stability measure stands at 0.46.
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 | 03-2018 | 03-2020 | 03-2022 | Trend |
|---|---|---|---|---|---|
| Revenue | 21% | 16% | 17% | 24% | -0.047% |
| Net Income | 32% | 54% | 58% | 74% | 20% |
| Stockholders Equity | 17% | 15% | 5.3% | 10% | -0.56% |
| FCF | 25% | 21% | 29% | 27% | 1.5% |
What is the 5 year Revenue CAGR?
The Revenue CAGR over the past 5 years is +16.21%.
What is the trend of Revenue growth?
The trend of Revenue growth rate over the past 5 years is -0.05%.
What is the 5 year Earnings CAGR?
The Earnings CAGR over the past 5 years is +54.35%.
What is the trend of Earnings growth?
The trend of Earnings growth rate over the past 5 years is +19.84%.
What is the 5 year Equity CAGR?
The Equity CAGR over the past 5 years is +14.71%.
What is the trend of Equity growth?
The trend of Equity growth rate over the past 5 years is -0.56%.
What is the 5 year FCF CAGR?
The FCF CAGR over the past 5 years is +20.92%.
What is the trend of FCF growth?
The trend of FCF growth rate over the past 5 years is +1.51%.