MICROCHIP TECHNOLOGY INC (MCHP) Stock Analysis

Price updated 4 days ago · SEC data refreshed 3 months ago ⓘ · Not investment advice

MICROCHIP TECHNOLOGY INC

MCHP Technology Semiconductors📄 SEC filings ↗ CUSIP 595017104
Valuation N/A
Long-term trend (200d) 5% above 200-day Risk 50/100 Elevated
▾ What's in the 50/100 risk score? (higher = riskier)
Fundamental health (43%) 62/100 → +26.6
leverage 40/100 · FCF trend 90/100
Smart money (short interest + insider buying) (31%) 45/100 → +14.1
Macro backdrop (VIX, curve, credit, fear/greed + week-over-week momentum) (26%) 35/100 → +9.0
early-warning: macro conditions deteriorating week-over-week
Total50/100

Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). See the Financial Health section for the full balance-sheet read.

💵 Price $74.20 · 4 days ago 📄 Financials SEC EDGAR · refreshed 3 months ago
📍 START HERE

How to read MCHP

We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.

Where to start — the sections that matter most for this stock
  1. 1 Reported earnings & margins ↓
    What the company actually reported — unaffected by the valuation being held.
  2. 2 Balance sheet & book value ↓
    Assets, liabilities and equity as filed.
  3. 3 Who's selling & betting against it ↓
    Insider and short-interest behaviour needs no valuation model.
Or — what are you trying to decide?
A note on process: fear-driven decisions — including fear of missing out — tend to be the expensive ones. A stock up 10% a day for three days is excitement, not evidence. Whichever reader you are, the data below is there to be checked before anything is decided.
🚀
"It's surging — should I chase it?"
The momentum / FOMO trade. Before you chase, see whether the people who know it best are quietly selling into the rally.
🏷️
"Is it a cheap bargain?"
The deep-value trade. How far below assets and our value it trades — and whether it's cheap for a reason.
ⓘ A share-count quirk blocked the per-share math

The share count we read for MCHP looks wrong — common for multi-class / founder-controlled filers that report shares per share-class. That makes per-share figures (including intrinsic value) misleading, so we suppressed them. The company's total financials below are sound.

What to use instead: Lean on the totals — revenue, net income, cash flow — and the balance sheet. Multi-class share counts are being corrected; once fixed, the per-share valuation returns automatically.

This note is only about the single DCF fair-value number — MCHP's full financial statements, health scores, and written analysis are all below.

ⓘ Why does MCHP trade at $74.20?

MICROCHIP TECHNOLOGY INC has 545.2 million shares outstanding. At $74.20 per share, the market values all outstanding MCHP equity at $40.5 billion. That's market capitalization, not enterprise value — enterprise value also accounts for debt and cash — and it matters here because MCHP carries substantial debt. The share price by itself tells you almost nothing — a company can pick any share price by splitting or issuing more shares. What matters is the total value (Market Cap?Market Cap — The total dollar value the market is assigning to the entire company.
Why it matters: This is the number that actually matters when comparing companies. Two companies with the same business but different share counts have the same market cap.
Reference: Mega cap >$200B · Large $10–200B · Mid $2–10B · Small $300M–2B · Micro <$300M
Full explanation →) compared to what the business actually produces. This page values MCHP in Per Share?Per Share — A company-level figure divided by total shares — what one share represents.
Why it matters: Per-share metrics are the only way to fairly compare two companies with different share counts.
Full explanation → economics — what each share represents of the underlying business. Play with the share-price calculator on the homepage →

Loading insider & short-seller data…
Checking filings for failure warnings…
VALUATION RANGE — CROSS-METHOD CHECK

Football field: where does the price sit?

Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.

$15$41$67$92$118Current price $74.20EV / Sales (p25→p75)$16.29$111.39
The current price sits inside each method's range — roughly fair on this blended view.

Industry multiples sourced from: industry: Semiconductors. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.

PEER BASKET — TIGHT COMPARABLES

How does MCHP stack up against its closest peers?

We take the 5 same-industry companies most similar to MCHP (similar size) and check what investors are paying for each dollar of their revenue (or profits). If MCHP is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.

▾ What's "EV / Sales" in plain English?

EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.

EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).

p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.

What peers trade at (p25 / median / p75)

Bold middle number = median peer. Half the peers trade above it, half below. Computed over 5 same-industry peers; implausible multiples excluded.

Peer-implied value check
Not enough clean peer EV/Sales multiples to derive a reliable median (some were dropped as implausible/outliers). The EV/EBIT and FCF-yield rows above are the better read here; also lean on the DCF.

⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.

▾ View peer list (8)
Ticker Company Industry Mcap EV/Sales EV/GPEV/EBIT FCF Yield
MCHPP MICROCHIP TECHNOLOGY INC Semiconductors $43.5B 10.4x 18.0x100.0x 2.8%
SIMO Silicon Motion Technology CORP Semiconductors $37.2B suspect 42.0x 86.9x399.5x 0.2%
MTSI MACOM Technology Solutions Holding Semiconductors $27.8B suspect 29.1x 53.2x217.2x 0.9%
LSCC LATTICE SEMICONDUCTOR CORP Semiconductors $20.2B suspect 38.5x 56.5x1,794.1x 0.3%
SITM SITIME Corp Semiconductors $18.7B 57.4x 107.1x— 0.1%
TSEM TOWER SEMICONDUCTOR LTD Semiconductors ·fallback $28.7B 18.4x 79.0x148.1x 0.4%
STM STMicroelectronics N.V. Semiconductors ·fallback $61.6B 5.4x 15.9x364.2x 5.4%
NXT Nextpower Inc. Semiconductors ·fallback $23.9B 6.7x 20.6x34.3x 1.6%
FINANCIAL HEALTH SCREENS

Quality & solvency checks

Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.

Altman Z-Score?Altman Z-Score — A bankruptcy-risk score combining 5 financial ratios into one number. Predictive of bankruptcy within 2 years.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
Not available for this filer

The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.

Piotroski F-Score?Piotroski F-Score — A 9-point quality checklist scoring profitability, leverage, and operating efficiency.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
6 / 9
Mediocre
▾ The checks — what passed, what didn't (and what we couldn't measure)
  • ✓ Positive net income
    Net income $230.0M in FY2026.
  • ✓ Positive operating cash flow
    Operating cash flow $962.1M (was $898.1M the prior year).
  • ✓ Cash flow backs up reported profit
    Operating cash flow $962.1M vs net income $230.0M.
  • ✓ Return on assets improving
    Return on assets 1.6% vs 0.0% a year ago.
  • ✗ Debt load (vs assets)
    Long-term debt is 38.2% of assets vs 36.6% a year ago ($5,496.4M of $14,370.1M assets).
    Why this matters: Rising debt relative to assets means more risk and more cash going to interest instead of shareholders. Falling debt is a sign of strengthening.
  • ✗ Short-term liquidity (current ratio)
    Current ratio 2.09x vs 2.59x a year ago.
    Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
  • ✗ Share count (dilution)
    Share count rose 1.5% (537.3M → 545.2M year-over-year).
    Why this matters: Issuing lots of new shares splits the pie into more pieces, shrinking your slice. Stable or falling share count protects existing owners.
  • ✓ Pricing power (gross margin)
    Gross margin 57.7% vs 56.1% a year ago.
  • ✓ Sales per asset (asset turnover)
    Asset turnover 0.33x vs 0.29x a year ago.

Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.

INTERACTIVE — TWEAK YOUR ASSUMPTIONS

What if you assume different inputs?

Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount Rate?Discount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for MCHP. Open Advanced to also change beta, growth and the rate path.

Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.

4.5% (risk-free)9-10% normal18% (deep-risk)
0%2-3% (GDP)5% (rarely sustainable)

A full intrinsic value isn't shown for MCHP because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.

For comparison — the revenue growth today's price already assumes
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
Where the discount rate comes from — discount rate = risk-free + beta × equity-risk-premium
What you'd earn risk-free from government bonds — the floor under every other rate. Slide it down to model the market expecting rate cuts (value rises); up for higher-for-longer.
The extra yearly return investors demand for owning stocks instead of safe bonds — the price of risk. History runs ~4.5–6.5%; we default to 5.5% (slightly conservative). It's an estimate, not a law — lower it if you think equities are less risky than that.
Inflation reduces the purchasing power of a nominal return: a 9% gain at 3% inflation is about 6% in real terms. The intrinsic value above is already in today's dollars (a nominal DCF carries inflation in both the growth and the discount rate), so this switch does not change the value — it restates the return in real terms.
Higher beta → higher discount rate (sets the rate above). 1.0 = moves with the market.
What you think MCHP can grow revenue for ~5 years, then fades to terminal.
For a pre-profit company: the % of revenue that eventually becomes free cash flow once mature. (Our published value uses the sector norm.)
All inputs start at the values our model used.

    Copy shareable link to this scenario →

    Price$74.20
    Model IVNot applicable — DCF couldn't price this stock. The other valuation lenses on this page (reverse-DCF, peers, sector lens — whichever apply to this filer) carry the read instead.

    A standard DCF?DCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
    Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
    Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
    Full explanation →     valuation is not meaningful for Microchip Technology due to its declining revenue (-8.8%/yr over 4yr) and compressing gross margins (65.2% to 57.7%). While the company is profitable and generates positive operating cash flow, investors are likely focused on its ability to reverse the revenue decline and stabilize margins. The #1 quantifiable risk is the continued revenue contraction.

    ⚠️ Stock-based compensation equals 29% of pre-SBC free cash flow; FCF used here is net of SBC (a real shareholder-dilution cost), so it is lower than the headline GAAP cash-flow figure.

    As of 3 months ago

    ANATOMY

    Anatomy of a share

    What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.

    MCHP MICROCHIP TECHNOLOGY INC stock anatomy showing per-share revenue, operating expenses, free cash flow, and debt
    4.9%
    profit
    Where each $1 of revenue goes
    Net profit — 4.9¢ of every dollar ($0.42/sh = latest fiscal-year net income ÷ current shares. The table below shows GAAP diluted EPS of $0.22, computed on that year's weighted-average diluted shares — the share count moved, which is why they differ)
    Costs & taxes — 95.1¢ (on $8.64 revenue/sh)
    Net margin = net income ÷ revenue (most recent fiscal year).
    Plain English: each share (at $74) represents $8.64 of revenue per share per year, $0.42 of net income per current share, and $1.13 of free cash flow per share from the latest fiscal year. Each share carries $10.08 of total debt (interest-bearing borrowings, current + long-term).
    What's free cash flow / what do these mean?

    Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.

    Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.

    Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.

    Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.

    THE KEY DEBATE

    What you actually need to decide

    Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.

    🐂 The Bull Case
    Revenue must re-accelerate from the current -8.8%/yr decline to justify current valuations, indicating a successful navigation of the semiconductor cycle.
    🐻 The Bear Case
    Continued gross margin compression from 65.2% to 57.7% combined with declining revenue could significantly erode profitability and cash generation.
    📌 Signposts to watch — update your view as these print
    • Quarterly revenue growth rates
    • Gross margin trends
    • Operating cash flow generation
    MOMENTUM — WHAT'S GETTING BETTER & WORSE

    The trend, in plain numbers (FY2025 → FY2026, latest reported)

    Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.

    ✅ Improving
    • Revenue grew +7% to $4.71B.
    • Free cash flow rose to $615.6M.
    • Gross margin improved to 58% (+2 pts).
    • Swung to a profit of $230.0M (from a loss the prior year).

    Nothing was clearly worsening year-over-year.

    WHO

    Management & Leadership

    Steve Sanghi has served as the CEO of Microchip Technology since 1990, also holding the position of Executive Chair. Ganesh Moorthy is the President and former COO, having been with the company for over two decades. Kurt Bjorkman serves as the Senior Vice President and CFO.

    Steve Sanghi
    Executive Chair and CEO
    Ganesh Moorthy
    President
    Kurt Bjorkman
    Senior Vice President and CFO
    WHAT

    What They Make

    Microchip Technology Inc. designs, develops, manufactures, and markets microcontroller, mixed-signal, analog, and Flash-IP integrated circuits. Their products are used by a wide range of customers across various embedded control applications.

    End Markets

    AutomotiveIndustrialConsumer

    Revenue Drivers

    Microcontrollers
    Analog products
    Mixed-signal products
    Market Cap: 40.5BBeta: 1.46
    WHY

    Why Is It Priced Like This?

    Why Customers Pay

    Broad product portfolio
    Reliable embedded solutions
    Long product lifecycles
    No discounted-cash-flow value for this filer We aren't publishing a discounted-cash-flow value here: the model's output failed our plausibility checks, so showing it would imply more precision than we have.

    What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.

    The market is likely pricing MCHP based on its consistent positive net income and operating cash flow, despite recent revenue declines. Investors are probably betting on the company's ability to navigate the current semiconductor cycle and return to growth, given its adequate current ratio of 2.09 and falling long-term debt. The market may be anticipating a turnaround in its declining revenue trend.

    HOW

    Business Model & Valuation

    How They Make Money

    Microcontrollers
    Analog products
    Mixed-signal products

    Free Cash Flow DCF

    Standard FCF DCF: positive free cash flow in a sector suited for cash-flow-based valuation. High P/FCF (83x) - market pricing significant growth.

    Show advanced inputs
    Revenue Growth-8.8%
    Historical Fcf Growth-27.8%
    Sector Default12.0%
    Best Estimate-2.6%
    Methodblend(70% revenue_cagr, 30% sector)+buyback(0.9%)
    Growth Basistotal

    What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.

    WHEN

    Maturity & Competitive Position

    Mature / low-growth

    Moat Signals

    Extensive product portfolio
    Long-standing customer relationships
    High switching costs for embedded systems

    Revenue has been declining at -8.8%/yr over the last four years, while net income has been positive in 4 out of the last 5 years.

    WHERE

    Geography & Markets

    Microchip Technology is headquartered in the US and operates globally, serving customers across North America, Europe, and Asia. Specific geographic revenue mix percentages are not available from current data sources.

    Geographic Risks

    Cyclicality of the semiconductor industry
    Intense competition in key product segments
    SIGNALS

    Market Signals

    These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.

    Model neutral, tape bullish
    RSI?RSI — Relative Strength Index — a 0-100 momentum gauge. Above 70 = overbought; below 30 = oversold.
    Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
    Reference: 30–70 normal · >70 overbought · <30 oversold
    Full explanation →     (14)    55.7NeutralMomentum is balanced — neither overbought nor oversold.
    MACD?MACD — Moving Average Convergence Divergence — compares a fast and a slow price trend to gauge momentum direction.
    Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
    Reference: Line above signal = bullish momentum · below = bearish
    Full explanation →    BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
    50-Day Average$82.64Price below (-10.2%)Price below its 50-day average = near-term downtrend.
    200-Day Average$70.59Price aboveThe 200-day line is the long-term trend divider — above it is generally considered a bull market for the stock.
    50 vs 200 CrossGolden50-day above 200-dayA "golden cross" — the medium trend has overtaken the long trend (often read as bullish).

    Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.

    QUALITY

    Data Quality & Risk Flags (7 notes — click to expand/collapse)
    Guardrail Notes (7)
    • Stock-based compensation equals 29% of pre-SBC free cash flow; FCF used here is net of SBC (a real shareholder-dilution cost), so it is lower than the headline GAAP cash-flow figure.
    • Latest FCF ($0.6B) is 2.7x net income ($0.2B) - using 3yr avg FCF to reduce one-time inflation.
    • Per-share growth boosted by buybacks: the company is retiring 0.9% of its shares per year, which adds directly to per-share growth on top of business growth. Final per-share growth used by the model: -1.7%/yr.
    • Terminal growth (3%) capped to 0% (80% of near-term growth -1.7%, floored to 0%).
    • Price is far above the model output - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
    • Extreme valuation (P/IV withheld — see the note above); output dominated by data/units issue (often a multi-class share-count mismatch). Suppressed.
    • DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
    FINANCIALS

    Financial Statements (5-year tables — click to expand)

    From MICROCHIP TECHNOLOGY INC's SEC filings (EDGAR).

    Income (5yr)

    YearRevenueNet IncomeEPS
    20264.7B230.0M$0.22
    20254.4B-500,000$-0.01
    20247.6B1.9B$3.48
    20238.4B2.2B$4.02
    20226.8B1.3B$2.27

    Cash Flow (5yr)

    YearOperating CFCapEx− SBC & adj.Free Cash Flow
    2026 962.1M 91.1M 255.4M 615.6M
    2025 898.1M 126.0M 180.4M 591.7M
    2024 2.9B 285.1M 177.5M 2.4B
    2023 3.6B 486.2M 170.4M 3.0B
    2022 2.8B 370.1M 210.2M 2.3B

    How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 962.1M − 91.1M − 255.4M (SBC & adj.) = 615.6M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a trailing 3-year average, not this single year.

    Balance Sheet

    Total Assets14.4B
    Total Liabilities7.9B (derived)
    Equity6.4B
    Total Debt5.5B
    YOU MIGHT ALSO LIKE

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    PG
    Methodology by Pouyan Golshani, MD — founder of Gighz. Savng was built by a physician for busy professionals: every number on this page comes from SEC filings (EDGAR) and FINRA data through transparent, rules-based models — no analyst opinions, no hidden inputs. How we calculate every number →
    ⚠️ Not investment advice. Automated model outputs, last refreshed May 30, 2026 (the analysis-refresh date, not the latest filing period). All models have blind spots. Full disclaimer →
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