Microchip Technology (MCHP)
Information Technology · $41.0B market cap · SEC CIK 0000827054
fundamentals score out of 100
Next reports on Nov 4, 2026, after the close, with analysts expecting $0.95 in earnings per share.
The case for MCHP
- Revenue up 20.9% on the year.
- Generated $871M of free cash flow in FY2025, 18% of revenue.
- Gross margin of 60% absorbs cost shocks.
- Pays a modest 2.1% dividend.
The case against
- Very expensive at 85.6× earnings. Years of growth are already in the price.
- Long-term debt of $5.4B would take 6 years of operating cash flow to repay.
- Revenue has shrunk 2.8% a year over five years.
- Return on equity of only 7%.
- Dividend takes 229% of earnings, leaving little cushion.
- Swings harder than the market (beta 1.85).
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. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 29 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 27 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 41 |
| Momentumhow the price has behaved lately | 42 |
| Stabilityhow violently it moves, what it owes and what it pays you | 27 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 85.6× |
|---|---|
| Price / book | 7.68× |
| Price / sales | 8.0× |
| Revenue growth (YoY) | +20.9% |
| EPS growth (YoY) | — |
| Gross margin | 60% |
| Operating margin | 16% |
| Net margin | 9% |
| Return on equity | 7% |
| Debt / equity | 0.83× |
| Current ratio | 1.92 |
| Dividend yield | 2.11% |
| Beta | 1.85 |
| 52-week range | $48.52 – $105.91 |
| Position in that range | 48% of the way up |
| 3-month return | -25.0% |
| 1-year return | +14.8% |
Five years of financials, as filed
Pulled from Microchip Technology's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $4.7B | $4.4B | $7.6B | $8.4B | $6.8B |
| Gross profit | $2.7B | $2.5B | $5.0B | $5.7B | $4.4B |
| Operating income | $490M | $296M | $2.6B | $3.1B | $1.8B |
| Net income | $230M | -$500K | $1.9B | $2.2B | $1.3B |
| Operating cash flow | $962M | $898M | $2.9B | $3.6B | $2.8B |
| Capital expenditure | $91.1M | $126M | $285M | $486M | $370M |
| Total assets | $14.3B | $15.6B | $16.1B | $16.1B | $16.0B |
| Shareholder equity | $6.6B | $6.0B | $7.1B | $6.3B | $5.8B |
| Cash | $251M | $586M | $281M | $289M | $314M |
| Long-term debt | $5.4B | $6.7B | $4.0B | $6.6B | $7.9B |
| Free cash flow | $871M | $772M | $2.6B | $3.1B | $2.5B |
| Gross margin | 57.7% | 56.1% | 65.4% | 67.5% | 65.2% |
| Operating margin | 10.4% | 6.7% | 33.7% | 36.9% | 27.1% |
| Net margin | 4.9% | -0.0% | 25.0% | 26.5% | 18.8% |
| Diluted shares | 545M | 537M | 548M | 557M | 566M |
Share count is down 3.7% over 4 years. Buybacks have been shrinking the pie.
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
- Business and Macroeconomic Environment
- Critical Accounting Policies and Estimates
- Selling, General and Administrative
- Amortization of Acquired Intangible Assets
- Recently Issued Accounting Pronouncements
- Evaluation of Disclosure Controls and Procedures
- Management Report on Internal Control Over Financial Reporting
- Changes in Internal Control over Financial Reporting
- Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
- Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated
- Report of Independent Registered Public Accounting Firm
- Opinion on the Financial Statements
- How We Addressed the Matter in Our Audit
- Opinion on Internal Control Over Financial Reporting