Microchip Technology Inc

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MCHP : NASDAQ : Technology
$62.14 up 0.17 | 0.27%
Today's Range: 61.84 - 62.73
Avg. Daily Volume: 2,197,200
09/30/16 - 4:14 PM ET

Financial Analysis


MICROCHIP TECHNOLOGY INC's gross profit margin for the first quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. MICROCHIP TECHNOLOGY INC has strong liquidity. Currently, the Quick Ratio is 1.81 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 20.66% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)799.41533.95
EBITDA ($mil)181.11185.97
EBIT ($mil)67.96125.59
Net Income ($mil)-113.36130.67


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)601.791532.55
Total Assets ($mil)7358.764856.99
Total Debt ($mil)3336.51858.7
Equity ($mil)2532.552098.88


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin59.1462.8
EBITDA Margin22.6534.82
Operating Margin8.523.52
Sales Turnover0.330.44
Return on Assets1.088.43
Return on Equity3.3219.52
Debt Q1 FY16 Q1 FY15
Current Ratio2.926.06
Debt/Capital0.570.47
Interest Expense34.4224.05
Interest Coverage1.975.22


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)215.03202.41
Div / share0.360.36
EPS-0.510.6
Book value / share11.7810.37
Institutional Own % n/a n/a
Avg Daily Volume2307148.02026971.0

Valuation


BUY. MICROCHIP TECHNOLOGY INC's P/E ratio indicates a significant premium compared to an average of 27.99 for the Semiconductors & Semiconductor Equipment industry and a significant premium compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 5.19 indicates a significant premium versus the S&P 500 average of 2.82 and a premium versus the industry average of 4.16. The price-to-sales ratio is well above both the S&P 500 average and 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 161.00 Peers 27.99   MCHP 16.13 Peers 16.13

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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MCHP 16.10 Peers 18.94   MCHP 1.24 Peers 2.65

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

MCHP is trading at a valuation on par with 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 5.19 Peers 4.16   MCHP -79.57 Peers -0.00

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 5.39 Peers 4.64   MCHP 13.32 Peers 4.90

Premium. 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 premium 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 significantly exceeds its peers.

 

 

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