What do the Fundamentals Predict for Microchip Technology Inc. (MCHP) Stock?

Microchip Technology Inc. (MCHP) receives a strong valuation ranking of 88 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. MCHP has a better value than 88% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

MCHP gets a 88 Valuation Rank today. Find out what this means to you and get the rest of the rankings on MCHP!

See Full MCHP Report

Metrics Analysis

MCHP has a trailing twelve month Price to Earnings (PE) ratio of 86.3 which places it above the histroical average of roughly 15. MCHP is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. MCHP's trailing-12-month earnings per share (EPS) of 0.86 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far. MCHP currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.21. The market is currently overvaluing MCHP in relation to its projected growth due to the PEG ratio being above the fair market value of 1. MCHP's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for MCHP at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for MCHP are worse than the average of the market resulting in a valuation score of 88. Click Here to get the full Report on Microchip Technology Inc. (MCHP) stock.