Microchip Technology Inc

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MCHP : NASDAQ : Technology
$55.59 up 1.30 | 2.40%
Today's Range: 54.31 - 55.60
Avg. Daily Volume: 2,019,900
07/26/16 - 10:08 AM ET

Financial Analysis


MICROCHIP TECHNOLOGY INC's gross profit margin for the fourth quarter of its fiscal year 2015 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 7.16 which clearly shows the ability to cover any short-term cash needs. MCHP managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 5.19% 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 FY15 Q4 FY14
Net Sales ($mil)557.65543.21
EBITDA ($mil)179.46186.54
EBIT ($mil)103.95113.36
Net Income ($mil)67.3699.4


Balance Sheet Q4 FY15 Q4 FY14
Cash & Equiv. ($mil)2446.041958.87
Total Assets ($mil)5567.524780.71
Total Debt ($mil)2483.041826.86
Equity ($mil)2150.922044.65


Profitability Q4 FY15 Q4 FY14
Gross Profit Margin62.4762.82
EBITDA Margin32.1834.34
Operating Margin18.6420.87
Sales Turnover0.390.45
Return on Assets5.827.71
Return on Equity15.0618.04
Debt Q4 FY15 Q4 FY14
Current Ratio8.117.53
Debt/Capital0.540.47
Interest Expense26.8220.11
Interest Coverage3.885.64


Share Data Q4 FY15 Q4 FY14
Shares outstanding (mil)204.08202.08
Div / share0.360.36
EPS0.310.45
Book value / share10.5410.12
Institutional Own % n/a n/a
Avg Daily Volume2027231.02572347.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 35.97 for the Semiconductors & Semiconductor Equipment industry and a significant premium compared to the S&P 500 average of 25.05. Conducting a second comparison, its price-to-book ratio of 5.10 indicates a significant premium versus the S&P 500 average of 2.81 and a premium versus the industry average of 4.20. 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MCHP 36.11 Peers 35.97   MCHP 14.75 Peers 26.17

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MCHP is trading at a valuation on par with 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 14.70 Peers 18.96   MCHP 0.32 Peers 2.94

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 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 5.10 Peers 4.20   MCHP -10.25 Peers -6.14

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

MCHP is trading at a premium to 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MCHP 5.05 Peers 4.88   MCHP 1.22 Peers 4.47

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MCHP significantly trails its peers on the basis of sales growth

 

 

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