Microchip Technology Inc

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MCHP : NASDAQ : Technology
$75.58 -1.17 | -1.52%
Today's Range: 75.41 - 76.72
Avg. Daily Volume: 3625100.0
04/28/17 - 4:00 PM ET

Financial Analysis

MICROCHIP TECHNOLOGY INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. MICROCHIP TECHNOLOGY INC has strong liquidity. Currently, the Quick Ratio is 1.76 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 20.71% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)834.37540.34
EBITDA ($mil)273.16166.57
EBIT ($mil)158.1990.39
Net Income ($mil)107.1861.21

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)669.641007.9
Total Assets ($mil)7144.585446.55
Total Debt ($mil)3123.992406.47
Equity ($mil)2566.92126.34

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin61.4262.63
EBITDA Margin32.7330.82
Operating Margin18.9616.73
Sales Turnover0.430.4
Return on Assets1.336.53
Return on Equity3.9316.75
Debt Q3 FY16 Q3 FY15
Current Ratio2.574.75
Interest Expense35.1427.51
Interest Coverage4.53.29

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)216.43203.5
Div / share0.360.36
Book value / share11.8610.45
Institutional Own % n/a n/a
Avg Daily Volume3539341.02136065.0


BUY. MICROCHIP TECHNOLOGY INC's P/E ratio indicates a significant premium compared to an average of 34.98 for the Semiconductors & Semiconductor Equipment industry and a significant premium compared to the S&P 500 average of 24.92. For additional comparison, its price-to-book ratio of 6.38 indicates a significant premium versus the S&P 500 average of 2.99 and a significant premium versus the industry average of 4.74. 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.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MCHP 184.46 Peers 34.98   MCHP 17.23 Peers 17.85

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 16.71 Peers 19.92   MCHP 1.15 Peers 1.39

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 discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MCHP 6.38 Peers 4.74   MCHP -74.85 Peers 0.42

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 significant 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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MCHP 5.34 Peers 4.62   MCHP 41.86 Peers 23.82

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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