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Microchip Technology Inc. (MCHP) Stock: How Does it Score on Fundamental Metrics?

Friday, January 14, 2022 03:38 PM | InvestorsObserver Analysts
Microchip Technology Inc. (MCHP) Stock: How Does it Score on Fundamental Metrics?

Microchip Technology Inc. (MCHP) receives a strong valuation score of 94 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. MCHP holds a better value than 94% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

Valuation Rank - 94
MCHP gets a 94 Valuation Rank today. Find out what this means to you and get the rest of the rankings on MCHP!

Metrics Analysis

MCHP has a trailing twelve month Price to Earnings (PE) ratio of 72.8. The historical average of roughly 15 shows a poor value for MCHP stock as investors are paying higher share prices relative to the company's earnings. MCHP's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 1.15 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. MCHP has a 12 month forward PE to Growth (PEG) ratio of 1.09. Markets are overvaluing MCHP in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 1.14999997's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

All together these valuation metrics paint a pretty adequate picture for MCHP at its current price due to a fairly valued PEG ratio despite strong growth. The PE and PEG for MCHP are around the average of the market resulting in a valuation score of 94. Click Here to get the full Report on Microchip Technology Inc. (MCHP) stock.

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