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

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Microchip Technology (MCHP - Free Report) closed the most recent trading day at $84.29, moving +0.72% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.08%. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq lost 4.81%.

Coming into today, shares of the chipmaker had lost 0.08% in the past month. In that same time, the Computer and Technology sector lost 2.99%, while the S&P 500 gained 0.64%.

Wall Street will be looking for positivity from Microchip Technology as it approaches its next earnings report date. In that report, analysts expect Microchip Technology to post earnings of $1.17 per share. This would mark year-over-year growth of 44.44%. Our most recent consensus estimate is calling for quarterly revenue of $1.75 billion, up 29.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.42 per share and revenue of $6.73 billion. These totals would mark changes of +33.94% and +23.77%, respectively, from last year.

It is also important to note the recent changes 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.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Microchip Technology is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, Microchip Technology is holding a Forward P/E ratio of 19.09. This valuation marks a discount compared to its industry's average Forward P/E of 21.89.

Also, we should mention that MCHP has a PEG ratio of 1. 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. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 1.46 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 23, which puts it in the top 10% 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.

To follow MCHP in the coming trading sessions, be sure to utilize Zacks.com.


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