Microchip Technology (MCHP) Stock Sinks As Market Gains: What You Should Know

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Microchip Technology (MCHP) closed the most recent trading day at $80.75, moving -0.3% from the previous trading session. This move lagged the S&P 500's daily gain of 0.62%. Meanwhile, the Dow gained 0.5%, and the Nasdaq, a tech-heavy index, lost 5.66%.

Coming into today, shares of the chipmaker had gained 9.2% in the past month. In that same time, the Computer and Technology sector gained 9.07%, while the S&P 500 gained 3.44%.

Wall Street will be looking for positivity from Microchip Technology as it approaches its next earnings report date. On that day, Microchip Technology is projected to report earnings of $1.64 per share, which would represent year-over-year growth of 19.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.29 billion, up 16.55% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.23 per share and revenue of $8.81 billion, which would represent changes of +3.49% and +4.45%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Microchip Technology. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 past month, the Zacks Consensus EPS estimate has moved 0.45% higher. Microchip Technology is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Microchip Technology's current valuation metrics, including its Forward P/E ratio of 12.99. For comparison, its industry has an average Forward P/E of 18.34, which means Microchip Technology is trading at a discount to the group.

Meanwhile, MCHP's PEG ratio is currently 0.77. 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. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 1.66 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 204, which puts it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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