Microchip Technology (MCHP)

Information Technology · $33.2B market cap · SEC CIK 0000827054

Next reports on Feb 3, 2027, after the close, with analysts expecting $0.93 in earnings per share.

52-week range $48.52 to $105.91. 43% below its 52-week high and 24% above its low.

The case for MCHP

• Revenue up 33.0% on the year.
• Generated $871M of free cash flow in FY2026, 18% of revenue.
• Earnings per share up 852.9%.
• Gross margin of 63% absorbs cost shocks.
• Current assets cover the near-term bills 2.2 times over.
• Pays a modest 2.1% dividend.

The case against

• Expensive for its growth: 39.6× earnings, where 7% a year of growth plus a 2.1% dividend would justify about 22×.
• Long-term debt of $5.5B would take 6 years of operating cash flow to repay.
• Operating profit covers its interest bill only 2.3 times.
• Revenue has shrunk 2.8% a year over five years.
• Dividend takes 131% of earnings, leaving little cushion.
• The price trend is weak (31/100): +9.3% over a year, −24.4% over three months, 43% below its 52-week high.

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.

The financials

The financials, five years deep

Pulled from Microchip Technology's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Microchip Technology says it does

Overview We develop, manufacture and sell smart, connected and secure embedded control solutions used by our customers for a wide variety of applications. With over 35 years of technology leadership, our broad product portfolio offers a Total System Solution for our customers that can provide a large portion of the silicon requirements in their applications. TSS is a combination of hardware, software and services which help our customers increase their revenue, reduce their costs and manage their risks compared to other solutions. Our strategic focus includes general purpose and specialized mixed-signal microcontrollers, microprocessors, analog, FPGA, data center, networking, and memory products. In July 2024, we entered the 64-bit mixed-signal microprocessor market furthering our expansion beyond 32-bit architecture. Our synergistic product portfolio empowers disruptive growth trends, including AI/ML, data centers, edge computing and…

Risk factors MCHP lists in its 10-K

• Our operating results are impacted by global economic conditions and may fluctuate in the future due to a number of factors that could reduce our net sales and profitability
• Our operating results may be adversely impacted by the inability of our key suppliers to provide us with necessary raw materials, components, or equipment
• We may lose sales if critical materials from concentrated sources become restricted or subject to export controls
• We are dependent on wafer foundries and other contractors, as are our SuperFlash and other licensees
• Our operating results may be adversely impacted by the financial viability and performance of our licensees, customers, distributors, resellers or suppliers
• We are highly dependent on foreign sales, suppliers, and operations, which exposes us to foreign political and economic risks
• Geopolitical instability in the Middle East may disrupt critical semiconductor materials, increase fuel costs, and adversely affect our ability to meet customer demand
• We depend on orders that are received and shipped in the same quarter and have limited visibility to product shipments other than orders placed under certain LTSAs
• Intense competition in the markets we serve may lead to pricing pressures, reduced sales or reduced market share
• Our success depends on our ability to introduce new products on a timely basis
• Our operating results will suffer if we ineffectively utilize our manufacturing capacity or fail to maintain manufacturing yields
• Our operating results are impacted by seasonality and wide fluctuations of supply and demand in the industry
• Our business is dependent on distributors to service our end customers
• Business interruptions to our operations or those of our key vendors, licensees or customers could harm our business
• Sales into governmental projects, and compliance with associated regulations, could have a material adverse effect on our results of operations
• We may not fully realize the anticipated benefits of our completed or future acquisitions or divestitures
• As a result of our acquisition activity our goodwill and intangible assets increased significantly and we may in the future incur impairments to goodwill or intangible assets
• Customer demands for us to implement business practices that are more stringent than legal requirements may reduce our revenue opportunities or cause us to incur higher costs
• We must attract and retain qualified personnel to be successful, and competition for qualified personnel has intensified
• The occurrence of events for which we are self-insured, or which exceed our insurance limits, may adversely affect our profitability and liquidity
• We face risks related to security vulnerabilities in our products
• We face risks to our business and proprietary confidential information due to use of AI
• Issues relating to the use of our technologies, including AI, may result in reputational or financial harm and liability
• We are exposed to various risks related to legal proceedings, investigations or claims
• Our contractual relationships with our customers expose us to risks and liabilities
• Failure to adequately protect our intellectual property could result in competitive harm, lost revenue or market opportunities
• Our reported financial results may be adversely affected by new accounting pronouncements or changes in existing accounting standards and practices
• The outcome of future examinations of our income tax returns and existing tax disputes could have an adverse effect on our results of operations
• Our business, financial condition and operating results may be adversely impacted by policies implemented globally by the current or future administrations
• We are subject to stringent environmental, climate change and other regulations, which may force us to incur significant expenses and impact our operations
• Customer demands and regulations related to conflict-free minerals and other substances incorporated into or used to manufacture our products may force us to incur additional expenses
• Failure to meet ESG expectations, standards or disclosure requirements or achieve our corporate responsibility goals, could adversely affect our business, results of operations, financial condition, or stock price
• The future trading price of our common stock could be subject to wide fluctuations in response to a variety of factors
• The amount and timing of our share repurchases may fluctuate in response to a variety of factors
• Our financial condition and results of operations could be adversely impacted if we do not effectively manage or refinance our current or future debt
• Conversion of our Convertible Debt, Series A Preferred Stock or Depositary Shares, or the payment of dividends on Series A Preferred Stock in shares of common stock, will dilute the ownership interest of our existing stockholders
• The Convertible Debt, Series A Preferred Stock or Depositary Shares may adversely affect the market price of our common stock
• Our common stock ranks junior to our Series A Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, winding-up or dissolution
• Fluctuations in foreign currency exchange rates could adversely impact our operating results

Filings

Other Information Technology companies