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Microchip Technology (MCHP) Increases Yet Falls Behind Market: What Investors Need to Know

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Microchip Technology (MCHP - Free Report) closed the most recent trading day at $86.08, moving +0.31% from the previous trading session. This move lagged the S&P 500's daily gain of 0.41%. Meanwhile, the Dow experienced a rise of 0.36%, and the technology-dominated Nasdaq saw an increase of 0.45%.

Prior to today's trading, shares of the chipmaker had gained 16.43% over the past month. This has outpaced the Computer and Technology sector's gain of 5.9% and the S&P 500's gain of 4.91% in that time.

The investment community will be paying close attention to the earnings performance of Microchip Technology in its upcoming release. It is anticipated that the company will report an EPS of $1.13, marking a 27.56% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.86 billion, indicating a 14.15% decrease compared to the same quarter of the previous year.

MCHP's full-year Zacks Consensus Estimates are calling for earnings of $5.39 per share and revenue of $8.14 billion. These results would represent year-over-year changes of -10.47% and -3.55%, respectively.

Any recent changes to analyst estimates for Microchip Technology should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.04% lower within the past month. As of now, Microchip Technology holds a Zacks Rank of #5 (Strong Sell).

With respect to valuation, Microchip Technology is currently being traded at a Forward P/E ratio of 15.92. This expresses a discount compared to the average Forward P/E of 21.8 of its industry.

One should further note that MCHP currently holds a PEG ratio of 1.32. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Semiconductor - Analog and Mixed industry had an average PEG ratio of 3.19 as trading concluded yesterday.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 22% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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