Microchip Technology Inc

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MCHP : NASDAQ : Technology
$78.71 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 2602900.0
06/27/17 - 4:00 PM ET

Financial Analysis

MICROCHIP TECHNOLOGY INC's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company grew its sales and net income significantly quarter versus same quarter a year prior, and was able to outpace the average competitor in the industry when comparing revenue growth, but not when comparing net income growth. MICROCHIP TECHNOLOGY INC is extremely liquid. Currently, the Quick Ratio is 2.53 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 52.06% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)902.67557.65
EBITDA ($mil)333.08179.46
EBIT ($mil)204.8103.95
Net Income ($mil)136.9167.36

Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)1302.772446.04
Total Assets ($mil)7686.885567.52
Total Debt ($mil)2950.482483.04
Equity ($mil)3270.712150.92

Profitability Q4 FY16 Q4 FY15
Gross Profit Margin62.6462.47
EBITDA Margin36.8932.18
Operating Margin22.6918.64
Sales Turnover0.440.39
Return on Assets2.145.82
Return on Equity5.2115.06
Debt Q4 FY16 Q4 FY15
Current Ratio3.278.11
Interest Expense41.6626.82
Interest Coverage4.923.88

Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)229.09204.08
Div / share0.360.36
Book value / share14.2810.54
Institutional Own % n/a n/a
Avg Daily Volume2559790.03436968.0


BUY. MICROCHIP TECHNOLOGY INC's P/E ratio indicates a significant premium compared to an average of 27.56 for the Semiconductors & Semiconductor Equipment industry and a significant premium compared to the S&P 500 average of 25.75. Conducting a second comparison, its price-to-book ratio of 5.61 indicates a significant premium versus the S&P 500 average of 3.09 and a premium versus the industry average of 5.29. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MICROCHIP TECHNOLOGY INC proves to trade at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MCHP 119.51 Peers 27.56   MCHP 17.31 Peers 18.89

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

MCHP is trading at a significant premium to its peers.


Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MCHP is trading at a valuation on par to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
MCHP 14.83 Peers 22.40   MCHP 0.21 Peers 1.23

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

MCHP is trading at a significant discount to its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MCHP trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MCHP 5.61 Peers 5.29   MCHP -55.04 Peers 14.91

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MCHP is trading at a valuation on par with its peers.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MCHP is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MCHP 5.38 Peers 5.19   MCHP 56.80 Peers 24.62

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MCHP is trading at a valuation on par with its industry on this measurement.


Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

MCHP has a sales growth rate that significantly exceeds its peers.



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