Microchip Technology (MCHP)
Technology · NASDAQ · US
Fundamentals
Valuation and ratings
Microchip Technology trades at $81.68, which is 57% above the $35.44 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 58 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 402.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Microchip Technology
Microchip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. It operates in two segments, Semiconductor Products and Technology Licensing. The company offers general-purpose 8-bit, 16-bit, 32-bit, and 64-bit mixed-signal microcontrollers; 32-bit and 64-bit embedded mixed-signal microprocessors; and specialized mixed-signal microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human-machine interface, security, wired connectivity, and wireless connectivity applications. It also provides analog products, including power management, linear, mixed-signal, high voltage, thermal management, discrete diodes and MOSFETs, radio frequency (RF), gate drivers, safety, security, timing, application-specific standard products, USB, Ethernet, wireless, and other interface products; field-programmable gate array (FPGA) products; and application development tools that enable system designers to program mixed-signal microcontroller, FPGA, and microprocessor products. In addition, the company offers memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random-access memory, and electrically erasable random-access memory for footprint devices. Further, it licenses its SuperFlash embedded flash and non-volatile memory technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate arrays, RF, analog, and neuromorphic compute products. Additionally, the company offers engineering services; wafer foundry, assembly, and test subcontracting manufacturing services; and timing systems, application-specific integrated circuits, and products for aerospace applications. The company was incorporated in 1989 and is headquartered in Chandler, Arizona.
MCHP passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Dodge & Cox, DODGE & COX$396.04M · 0.2% of book
- Steve Cohen, Point72 Asset Management, L.P.$150.15M · 0.2% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$82.40M · 0.0% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$66.96M · 0.1% of book
- Ken Griffin, CITADEL ADVISORS LLC$51.97M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Microchip Technology (MCHP) undervalued?
Against our discounted cash flow estimate of $35.44, MCHP at $81.68 is 57% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own MCHP?
5 of the institutions we track reported a position in MCHP in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is MCHP's P/E ratio?
MCHP trades at 402.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for MCHP, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.