Latest news with #MCHP
Yahoo
2 days ago
- Business
- Yahoo
Microchip Beats Q2 Estimates but Shares Sink 5% on Tepid Outlook
Aug 8 - Microchip Technology (NASDAQ:MCHP) shares fell about 5% in Friday trading despite second-quarter fiscal 2026 results that exceeded analyst forecasts, as some investors viewed the outlook as underwhelming, according to a Friday press release. Warning! GuruFocus has detected 4 Warning Signs with MCHP. The Arizona-based chipmaker reported non-GAAP earnings per share of $0.27, topping estimates by $0.03, while revenue rose to $1.08 billion, beating projections by $20 million. Gross margin improvements and stronger-than-seasonal revenue guidance were noted, but analysts flagged that elevated expectations may have tempered investor reaction. Citi, KeyBanc, and Stifel maintained Buy or Overweight ratings, citing easing inventory headwinds, stronger backlogs for the September quarter, and progress on Microchip's Nine Point Recovery Plan. Stifel raised its 2026 EPS forecast to $1.47 from $1.35 and revenue to $4.6 billion from $4.56 billion. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Microchip Technology (NASDAQ:MCHP) Posts Better-Than-Expected Sales In Q2 But Stock Drops
Analog chipmaker Microchip Technology (NASDAQ:MCHP) reported Q2 CY2025 results topping the market's revenue expectations , but sales fell by 13.4% year on year to $1.08 billion. The company expects next quarter's revenue to be around $1.13 billion, close to analysts' estimates. Its non-GAAP profit of $0.27 per share was 13.2% above analysts' consensus estimates. Is now the time to buy Microchip Technology? Find out in our full research report. Microchip Technology (MCHP) Q2 CY2025 Highlights: Revenue: $1.08 billion vs analyst estimates of $1.06 billion (13.4% year-on-year decline, 1.7% beat) Adjusted EPS: $0.27 vs analyst estimates of $0.24 (13.2% beat) Adjusted EBITDA: $285.8 million vs analyst estimates of $243.4 million (26.6% margin, 17.4% beat) Revenue Guidance for Q3 CY2025 is $1.13 billion at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q3 CY2025 is $0.33 at the midpoint, above analyst estimates of $0.31 Operating Margin: 3%, down from 17.7% in the same quarter last year Free Cash Flow Margin: 24%, similar to the same quarter last year Inventory Days Outstanding: 213, down from 251 in the previous quarter Market Capitalization: $35.74 billion Steve Sanghi, Microchip's CEO and President commented that "Fiscal 2026 is off to a strong start as revenue grew 10.8% sequentially to approximately $1.0755 billion, well ahead of our revised guidance. As we execute our strategic imperatives under our nine-point recovery plan, we are seeing improvements across key financial metrics and emerging from the prolonged industry downturn with enhanced operational capabilities and a strengthened financial position. The momentum from the March quarter has accelerated into fiscal 2026, validating our strategic plan and positioning us well to capitalize on the recovery." Company Overview Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Microchip Technology's demand was weak and its revenue declined by 4.2% per year. This wasn't a great result and suggests it's a low quality business. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions. Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Microchip Technology's recent performance shows its demand remained suppressed as its revenue has declined by 30.5% annually over the last two years. This quarter, Microchip Technology's revenue fell by 13.4% year on year to $1.08 billion but beat Wall Street's estimates by 1.7%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 2.9% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 16.4% over the next 12 months, an improvement versus the last two years. This projection is healthy and suggests its newer products and services will fuel better top-line performance. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Product Demand & Outstanding Inventory Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production. This quarter, Microchip Technology's DIO came in at 213, which is 46 days above its five-year average. These numbers suggest that despite the recent decrease, the company's inventory levels are higher than what we've seen in the past. Key Takeaways from Microchip Technology's Q2 Results We were impressed by Microchip Technology's strong improvement in inventory levels. We were also excited its EPS outperformed Wall Street's estimates by a wide margin. On the other hand, its revenue guidance for next quarter slightly missed. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 6.8% to $61.73 immediately following the results. Is Microchip Technology an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Business Insider
2 days ago
- Business
- Business Insider
Mizuho Securities Reaffirms Their Buy Rating on Microchip (MCHP)
In a report released yesterday, Vijay Rakesh from Mizuho Securities maintained a Buy rating on Microchip, with a price target of $85.00. The company's shares closed yesterday at $66.22. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. According to TipRanks, Rakesh is a 5-star analyst with an average return of 18.9% and a 55.80% success rate. Rakesh covers the Technology sector, focusing on stocks such as Advanced Micro Devices, Broadcom, and Credo Technology Group Holding Ltd. In addition to Mizuho Securities, Microchip also received a Buy from Citi's Christopher Danely in a report issued on July 25. However, on August 2, TR | OpenAI – 4o reiterated a Hold rating on Microchip (NASDAQ: MCHP). MCHP market cap is currently $36.23B and has a P/E ratio of -8,069.51. Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MCHP in relation to earlier this year. Most recently, in May 2025, Karlton D Johnson, a Director at MCHP sold 494.00 shares for a total of $29,980.86.
Yahoo
3 days ago
- Business
- Yahoo
Microchip Tech (MCHP) Q1 Earnings: How Key Metrics Compare to Wall Street Estimates
Microchip Technology (MCHP) reported $1.08 billion in revenue for the quarter ended June 2025, representing a year-over-year decline of 13.4%. EPS of $0.27 for the same period compares to $0.53 a year ago. The reported revenue represents a surprise of +2.06% over the Zacks Consensus Estimate of $1.05 billion. With the consensus EPS estimate being $0.24, the EPS surprise was +12.5%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Microchip Tech performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net Sales- Mixed-signal Microcontrollers: $532.6 million versus the eight-analyst average estimate of $525.59 million. The reported number represents a year-over-year change of -17.4%. Net Sales- Other: $226.7 million versus the eight-analyst average estimate of $243.63 million. The reported number represents a year-over-year change of -14.8%. Net Sales- Analog: $316.2 million versus the eight-analyst average estimate of $281.86 million. The reported number represents a year-over-year change of -4.4%. View all Key Company Metrics for Microchip Tech here>>> Shares of Microchip Tech have returned -11.4% over the past month versus the Zacks S&P 500 composite's +1.2% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
3 Large-Cap Stocks We Think Twice About
Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players. These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. Keeping that in mind, here are three large-cap stocks that may face near-term headwinds and some other investments you should consider instead. Microchip Technology (MCHP) Market Cap: $38.06 billion Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices. Why Do We Think MCHP Will Underperform? Annual sales declines of 3.6% for the past five years show its products and services struggled to connect with the market during this cycle Operating margin declined by 11.6 percentage points over the last five years as its sales cratered Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 16 percentage points Microchip Technology is trading at $70.53 per share, or 62.5x forward P/E. Dive into our free research report to see why there are better opportunities than MCHP. Danaher (DHR) Market Cap: $145.3 billion Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE:DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics. Why Does DHR Fall Short? Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.9% annually over the last two years Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth 7.9 percentage point decline in its free cash flow margin over the last five years reflects the company's increased investments to defend its market position At $203 per share, Danaher trades at 25.1x forward P/E. Check out our free in-depth research report to learn more about why DHR doesn't pass our bar. Regeneron (REGN) Market Cap: $59.03 billion Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ:REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders. Why Does REGN Give Us Pause? Scale is a double-edged sword because it limits the company's growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 6.7% for the last two years Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 12.3 percentage points Waning returns on capital imply its previous profit engines are losing steam Regeneron's stock price of $558.67 implies a valuation ratio of 14x forward P/E. To fully understand why you should be careful with REGN, check out our full research report (it's free). High-Quality Stocks for All Market Conditions When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses. Don't let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
