Here's Why Microchip Technology (MCHP) Fell More Than Broader Market
Microchip Technology (MCHP) closed at $83.40 in the latest trading session, marking a -1.38% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.34%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq lost 0.56%.
Shares of the chipmaker have appreciated by 1.14% over the course of the past month, underperforming the Computer and Technology sector's gain of 1.27% and the S&P 500's gain of 2.56%.
Analysts and investors alike will be keeping a close eye on the performance of Microchip Technology in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.13, indicating a 27.56% decline compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $1.86 billion, showing a 14.15% drop compared to the year-ago quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.39 per share and revenue of $8.14 billion, indicating changes of -10.47% and -3.57%, respectively, compared to the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Microchip Technology. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. Microchip Technology is holding a Zacks Rank of #4 (Sell) right now.
With respect to valuation, Microchip Technology is currently being traded at a Forward P/E ratio of 15.69. This expresses a discount compared to the average Forward P/E of 27.52 of its industry.
We can additionally observe that MCHP currently boasts a PEG ratio of 1.3. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 3.58 based on yesterday's closing prices.
The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 202, this industry ranks in the bottom 20% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
