Microchip Technology (MCHP) Exceeds Market Returns: Some Facts to Consider
In the latest market close, Microchip Technology (MCHP) reached $90.74, with a +1.45% movement compared to the previous day. The stock exceeded the S&P 500, which registered a gain of 0.22% for the day. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.32%.
The the stock of chipmaker has fallen by 0.83% in the past month, lagging the Computer and Technology sector's gain of 3.64% and the S&P 500's gain of 1.61%.
The investment community will be paying close attention to the earnings performance of Microchip Technology in its upcoming release. The company is slated to reveal its earnings on February 1, 2024. The company's upcoming EPS is projected at $1.06, signifying a 32.05% drop compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $1.79 billion, indicating a 17.44% decline compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.27 per share and revenue of $8.02 billion. These totals would mark changes of -12.46% and -4.99%, respectively, from last year.
Investors should also take note of any recent adjustments 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.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.48% lower. Microchip Technology currently has a Zacks Rank of #5 (Strong Sell).
Investors should also note Microchip Technology's current valuation metrics, including its Forward P/E ratio of 16.96. Its industry sports an average Forward P/E of 27.95, so one might conclude that Microchip Technology is trading at a discount comparatively.
It is also worth noting that MCHP currently has a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Semiconductor - Analog and Mixed industry had an average PEG ratio of 3.76.
The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 215, positioning it in the bottom 15% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
