One-glance verdict
Within fair range
$69.86 our estimate vs market $74.39
Wall Street consensus: $106.52 (52.5% higher than our fair-value estimate)
6% above our estimate
Fundamentals snapshot
Microchip Technology Incorporated
MCHP · NMS · Technology · Semiconductors
Current price
$74.39
52-week range
$48.52 - $105.91
Market cap
$40.40B
Balance sheet
Stretched
2.46x Stretched
Net debt $5.13B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 8.7% last year.
- Reward Returns 7.2% on equity, ahead of 16% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 36.9% to 24.0% over 3 years.
What this company does
Microchip Technology Incorporated
Microchip Technology makes tiny computer chips that control everything from cars to refrigerators, and their money mainly comes from selling these chips to other companies who build electronics. This is important because these chips are essential for making modern devices work, and their ability to consistently make and sell them impacts the overall health of the technology industry.
How the company got here
Microchip Technology was founded in 1989, starting with a focus on microcontrollers, which are like tiny computers on a chip. Over the years, the company grew by acquiring other businesses and expanding its product line to include a wider range of specialized chips. This strategy allowed Microchip to become a key player in providing essential components for many different types of electronic devices. Their growth has been driven by a consistent focus on innovation and meeting the evolving needs of the technology sector.
What it actually does
Microchip Technology designs and sells tiny computer chips, called semiconductors, that are the brains behind many electronic devices we use every day. These chips control everything from the temperature in your car to the functions on your washing machine. Think of them as the essential building blocks that make devices smart, connected, and secure. They offer a vast array of these chips, catering to very specific needs across numerous industries.
Semiconductor Products
This is Microchip's largest business, where they design and sell a wide variety of microcontrollers and microprocessors. These chips act as the control centers for countless electronic devices, from automotive systems and industrial equipment to consumer electronics. Customers in these industries purchase these chips to power the functionality of their products. This segment represents the core of Microchip's revenue, making it the primary engine of the company's financial performance.
Technology Licensing
In this smaller segment, Microchip licenses its specialized memory chip technologies to other companies. These companies, like chip manufacturers and designers, pay Microchip for the right to use their patented technology in their own products. This allows Microchip to generate revenue from its intellectual property without directly manufacturing the final chips themselves. While not as large as their product sales, it provides a steady stream of income and leverages their expertise.
What management is betting on now
Microchip's leadership is focused on expanding their offerings in high-growth areas like automotive and industrial applications, where demand for sophisticated chips is increasing. They are also investing in developing more advanced and secure embedded control solutions to meet the growing needs of connected devices. The company aims to continue its strategy of strategic acquisitions to broaden its technology portfolio and market reach. By focusing on these areas, Microchip seeks to maintain its competitive edge and drive future growth.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$22.80M
FY2025 Q3
$253.40M
FY2025 Q4
$191.70M
FY2026 Q1
$257.70M
FY2026 Q2
$51.60M
FY2026 Q3
$318.90M
FY2026 Q4
$242.80M
FY2027 Q1
$497.60M
Revenue
$1.48B
Net income
$229.80M
Diluted EPS
0.37
Operating cash flow
$511.50M
Free cash flow
$497.60M
Fetching…
Sources
Revenue
$1.31B
Net income
$144.20M
Diluted EPS
0.22
Operating cash flow
$257.00M
Free cash flow
$242.80M
Fetching…
Sources
Revenue
$1.19B
Net income
$62.70M
Diluted EPS
0.06
Operating cash flow
$341.40M
Free cash flow
$318.90M
Fetching…
Sources
Revenue
$1.14B
Net income
$41.70M
Diluted EPS
0.03
Operating cash flow
$88.10M
Free cash flow
$51.60M
Fetching…
Sources
Revenue
$1.08B
Net income
$-18.60M
Diluted EPS
-0.09
Operating cash flow
$275.60M
Free cash flow
$257.70M
Fetching…
Sources
Revenue
$970.50M
Net income
$-154.60M
Diluted EPS
-0.29
Operating cash flow
$205.90M
Free cash flow
$191.70M
Fetching…
Sources
Revenue
$1.03B
Net income
$-53.60M
Diluted EPS
-0.10
Operating cash flow
$271.50M
Free cash flow
$253.40M
Fetching…
Sources
Revenue
$1.16B
Net income
$78.40M
Diluted EPS
0.14
Operating cash flow
$43.60M
Free cash flow
$22.80M
Fetching…
Sources
Is it cheap or expensive?
Fair value $69.86 vs current price $74.39
Wall Street consensus is the average analyst price target: $106.52 (52.5% higher than our fair-value estimate).
Our most-likely fair value is $69.86 a share — about 6.1% away from today's price of $74.39, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $5.1B. Interest coverage 2.5x.
Net debt
$5.13B
Interest coverage
2.46x
Microchip Technology Incorporated's profit covers its interest bill about 2.5 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
MCHP
BASELINE
Microchip Technology Incorporated
Total debt $5.40B Interest coverage 2.46x This is the baseline the peer rows are being compared against.
Total debt $10.98B Interest coverage 6.51x +165% vs MCHP Carries about 2.6x more debt cushion than MCHP.
Total debt $13.56B Interest coverage 11.31x +360% vs MCHP Carries about 4.6x more debt cushion than MCHP.
Total debt $9.16B Interest coverage 9.45x +284% vs MCHP Carries about 3.8x more debt cushion than MCHP.
Total debt $4.23B Interest coverage 5.87x +139% vs MCHP Carries about 2.4x more debt cushion than MCHP.
Total debt $4.71B Interest coverage 10.59x +331% vs MCHP Carries about 4.3x more debt cushion than MCHP.
What you should know
The case for and against MCHP
3 Rewards
1 Risk
Rewards
-
Revenue grew 8.7% last year.
-
Returns 7.2% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 36.9% to 24.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
109.40x
Forward P/E
16.18x
P/B
6.26x
P/S
7.89x
EV/EBITDA
30.27x
PEG ratio
0.23x
Profitability
How much profit each dollar creates
Gross margin
60.2%
Operating margin
24.0%
Net margin
9.3%
ROE
7.2%
ROA
3.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.84x
Current ratio
1.92x
Quick ratio
0.96x
Total debt
$5.40B
Total cash
$272.30M
Growth
How the business has been compounding
Revenue TTM
$5.12B
Revenue 5Y CAGR
-8.8%
EPS TTM
0.68
EPS 5Y CAGR
-62.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.20B
Free CF TTM
$871.00M
FCF margin
17.0%
Dividend
Shareholder payout
Yield
2.4%
Payout ratio
267.6%
Last ex-div date
2026-08-24