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Microchip Technology (MCHP) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Microchip Technology (MCHP) closed at $61.03, marking a -1.55% move from the previous day. This change lagged the S&P 500's daily loss of 1.51%. Meanwhile, the Dow lost 1.71%, and the Nasdaq, a tech-heavy index, lost 0.02%.

Heading into today, shares of the chipmaker had lost 4.53% over the past month, outpacing the Computer and Technology sector's loss of 11.76% and the S&P 500's loss of 9.52% in that time.

Wall Street will be looking for positivity from Microchip Technology as it approaches its next earnings report date. In that report, analysts expect Microchip Technology to post earnings of $1.44 per share. This would mark year-over-year growth of 34.58%. Meanwhile, our latest consensus estimate is calling for revenue of $2.06 billion, up 25.01% from the prior-year quarter.

MCHP's full-year Zacks Consensus Estimates are calling for earnings of $5.70 per share and revenue of $8.14 billion. These results would represent year-over-year changes of +23.64% and +19.4%, respectively.

Investors might also notice recent changes to analyst estimates for Microchip Technology. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Microchip Technology currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Microchip Technology is holding a Forward P/E ratio of 10.87. This valuation marks a discount compared to its industry's average Forward P/E of 13.67.

Investors should also note that MCHP has a PEG ratio of 0.74 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 0.74 based on yesterday's closing prices.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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