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In the latest trading session, Microchip Technology (MCHP) closed at $57.91, marking a -1.78% move from the previous day. This change lagged the S&P 500's daily gain of 0.95%. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, added 0.15%.
Heading into today, shares of the chipmaker had lost 13.37% over the past month, lagging the Computer and Technology sector's loss of 2.82% and the S&P 500's loss of 3.49% in that time.
Microchip Technology will be looking to display strength as it nears its next earnings release. In that report, analysts expect Microchip Technology to post earnings of $1.34 per share. This would mark year-over-year growth of 35.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.96 billion, up 24.67% from the year-ago period.
MCHP's full-year Zacks Consensus Estimates are calling for earnings of $5.45 per share and revenue of $7.9 billion. These results would represent year-over-year changes of +18.22% and +15.88%, respectively.
Investors might also notice recent changes to analyst estimates for Microchip Technology. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.1% lower within the past month. Microchip Technology is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Microchip Technology is holding a Forward P/E ratio of 10.82. This valuation marks a discount compared to its industry's average Forward P/E of 16.02.
It is also worth noting that MCHP currently has a PEG ratio of 0.5. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 0.85 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 20, which puts it in the top 8% 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.
To follow MCHP in the coming trading sessions, be sure to utilize Zacks.com.