Microchip Technology Incorporated Fundamental Analysis (NASDAQ: MCHPP)
Microchip Technology Incorporated Fundamental Analysis (NASDAQ: MCHPP)
Microchip Technology Incorporated (NASDAQ: MCHPP) shows weak financial fundamentals with a PE ratio of 46.72, profit margin of 14.46%, and ROE of 12.43%. The company generates $5.6B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 61.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze MCHPP's fundamental strength across five key dimensions:
Efficiency Score
WeakMCHPP struggles to generate sufficient returns from assets.
Valuation Score
ModerateMCHPP shows balanced valuation metrics.
Growth Score
ModerateMCHPP shows steady but slowing expansion.
Financial Health Score
ExcellentMCHPP maintains a strong and stable balance sheet.
Profitability Score
WeakMCHPP struggles to sustain strong margins.
Key Financial Metrics
Is MCHPP Expensive or Cheap?
P/E Ratio
MCHPP trades at 46.72 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, MCHPP's PEG of 0.02 indicates potential undervaluation.
Price to Book
The market values Microchip Technology Incorporated at 5.10 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.11 times EBITDA. This signals the market has high growth expectations.
How Well Does MCHPP Make Money?
Net Profit Margin
For every $100 in sales, Microchip Technology Incorporated keeps $14.46 as profit after all expenses.
Operating Margin
Core operations generate 20.77 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.43 in profit for every $100 of shareholder equity.
ROA
Microchip Technology Incorporated generates $5.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Microchip Technology Incorporated generates strong operating cash flow of $1.53B, reflecting robust business health.
Free Cash Flow
Microchip Technology Incorporated generates strong free cash flow of $1.46B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.68 in free cash annually.
FCF Yield
MCHPP converts 4.30% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
46.72
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.10
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.06
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.84
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.24
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How MCHPP Stacks Against Its Sector Peers
| Metric | MCHPP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 46.72 | 32.70 | Worse (Expensive) |
| ROE | 12.43% | 758.00% | Weak |
| Net Margin | 14.46% | -4312.00% (disorted) | Strong |
| Debt/Equity | 0.84 | 0.96 | Neutral |
| Current Ratio | 2.24 | 12.15 | Strong Liquidity |
| ROA | 5.53% | 1067467.00% | Weak |
MCHPP outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Microchip Technology Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Growth, Innovation, High Beta
EPS CAGR
N/A
Industry Style: Growth, Innovation, High Beta
FCF CAGR
N/A
Industry Style: Growth, Innovation, High Beta