Microchip Technology Inc.

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MCHP : NASDAQ : Electronic Technology
$85.12 up 2.6 | 3.2%
Today's Range: 82.23 - 83.819
Avg. Daily Volume: 2484900.0
02/20/18 - 9:38 AM ET

Financial Analysis


MICROCHIP TECHNOLOGY INC's gross profit margin for the third quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. MICROCHIP TECHNOLOGY INC is extremely liquid. Currently, the Quick Ratio is 2.18 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 24.08% 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 Q3 FY17 Q3 FY16
Net Sales ($mil)994.21834.37
EBITDA ($mil)401.34273.16
EBIT ($mil)246.66158.19
Net Income ($mil)-251.09107.18


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)1099.59669.64
Total Assets ($mil)8123.797144.58
Total Debt ($mil)3039.623123.99
Equity ($mil)3185.082566.9


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin64.4561.42
EBITDA Margin40.3632.73
Operating Margin24.8118.96
Sales Turnover0.480.43
Return on Assets3.021.33
Return on Equity7.73.93
Debt Q3 FY17 Q3 FY16
Current Ratio2.982.57
Debt/Capital0.490.55
Interest Expense49.7435.14
Interest Coverage4.964.5


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)234.34216.43
Div / share0.360.36
EPS-1.070.46
Book value / share13.5911.86
Institutional Own % n/a n/a
Avg Daily Volume2559649.01858922.0

Valuation


BUY. MICROCHIP TECHNOLOGY INC's P/E ratio indicates a significant premium compared to an average of 37.56 for the Semiconductors & Semiconductor Equipment industry and a significant premium compared to the S&P 500 average of 25.51. For additional comparison, its price-to-book ratio of 6.07 indicates a significant premium versus the S&P 500 average of 3.26 and a discount versus the industry average of 6.88. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MCHP 85.04 Peers 37.56   MCHP 14.36 Peers 23.82

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.

 

Discount. 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 significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MCHP 14.22 Peers 20.48   MCHP 0.13 Peers 0.82

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MCHP 6.07 Peers 6.88   MCHP 136.58 Peers 103.74

Discount. 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 discount to its peers.

 

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

MCHP is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MCHP 4.98 Peers 5.96   MCHP 26.71 Peers 22.16

Discount. 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 discount to 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 exceeds its peers.

 

 

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