# Microchip Technology (MCHP.US)

Canonical: https://gigainvestors.com/s/MCHP

Analysis as of: 2026-10-16T07:30:06.522Z. Financial observations: FY1997–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $74.26 per share; close as of 2026-10-15.

Estimated value: low $31.44 per share, central $35.73 per share, high $41.44 per share. Buy at or below the central value $35.73 per share. Valuation as of 2026-10-16T07:30:06.522Z; scenarios are not confidence intervals.

Expected annual return: 6.3% at the stated quote. About 6.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 1

- Operating margin variation: 0.49×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.24×

- FY2019: 0.13×

- FY2020: 0.12×

- FY2021: 0.18×

- FY2022: 0.27×

- FY2023: 0.37×

- FY2024: 0.34×

- FY2025: 0.07×

- FY2026: 0.10×

- LTM to Jun 2026: 0.16×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 13.4%

- ROIC, second-lowest year: 8.0%

- Typical minus recent gross margin: 3.4 pp

- Typical gross margin (annual median): 61.1%

- Recent gross margin (lower of latest and 3-year median): 57.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.3%

- ROIC including acquisitions, ten-year median: 11.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 32.9%

- FY2019: 8.4%

- FY2020: 8.0%

- FY2021: 13.4%

- FY2022: 24.2%

- FY2023: 38.6%

- FY2024: 36.4%

- FY2025: 3.6%

- FY2026: 8.2%

- LTM to Jun 2026: 13.4%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.55×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $8.7B

- Net income, five-year total: $5.6B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 1.7 pp

- Working capital / revenue, change between three-year averages: 12.5 pp

- Working capital / revenue, final three-year average: 35.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.60×

- FY2023: 1.23×

- FY2024: 1.31×

- FY2025: -1,247.20×

- FY2026: 3.96×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 10.5% vs 8.2%

- Per-share earnings: 0.51 to 0.37 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.3%

- Ordinary dilution, 5-year annual growth: 0.1%

- Market cap gain: $18B

- Cumulative retained earnings: $3.4B

- Diluted shares, 10-year annual growth: 2.3%

- Diluted shares, 5-year annual growth: 0.1%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -4.0%

- Per-share value change: -$0.14

- Per-share value, starting three-year median: $0.51

- Per-share value, ending three-year median: $0.37

- Buybacks concentrated in cheaper years (correlation): 0.62

- Average buyback yield: 0.9%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Acquisition spending: $12B

- Cumulative net income, 10 years: $7.3B

- ROIC, first three-year median: 10.5%

- ROIC, last three-year median: 8.2%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.35

- FY2018: $0.51

- FY2019: $0.71

- FY2020: $1.11

- FY2021: $0.65

- FY2022: $2.27

- FY2023: $4.02

- FY2024: $3.48

- FY2025: -$0.00

- FY2026: $0.37

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -5.3%

- Receivables to sales index (DSRI): 1.21×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 26.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 4.76×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.36×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -11.7%

- FY2018: -14.1%

- FY2019: -7.2%

- FY2020: -5.6%

- FY2021: -9.5%

- FY2022: -9.6%

- FY2023: -8.5%

- FY2024: -6.2%

- FY2025: -5.8%

- FY2026: -5.3%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Ron Muhlenkamp](https://gigainvestors.com/MUHL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 24% since May 2024 · "Microchip Gains From Rising Mixed-Signal MCU Demand: What's Ahead?" (finance.yahoo.com, Jul 2026) · sales +8.7%

Story as of 2026-10-16T09:59:08.230Z; price observation 2026-10-15.

Price needs cash profits to grow 10.2% a year for ten years

- 2025-05-30: Microchip Technology (NasdaqGS:MCHP) Raises Sales Guidance for Fiscal Q1 2026 ([finance.yahoo.com](https://finance.yahoo.com/news/microchip-technology-nasdaqgs-mchp-raises-171426538.html))

- 2025-07-24: Microchip Tech (MCHP) Sheds 6.7% as Chip Giant Signals Soft Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/microchip-tech-mchp-sheds-6-200338308.html))

- 2025-08-08: Microchip Beats Q2 Estimates but Shares Sink 5% on Tepid Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/microchip-beats-q2-estimates-shares-190424881.html))

- 2025-11-15: How Subdued Guidance and Inventory Pressures Could Shape Microchip Technology’s (MCHP) Earnings Trajectory ([finance.yahoo.com](https://finance.yahoo.com/news/subdued-guidance-inventory-pressures-could-201016869.html))

- 2025-12-05: Microchip Technology (MCHP): Reassessing Valuation After Outlook Upgrade and New Power Monitor Launch ([finance.yahoo.com](https://finance.yahoo.com/news/microchip-technology-mchp-reassessing-valuation-150545515.html))

- 2026-01-05: Microchip Technology raises Q3 revenue forecast on strong bookings ([finance.yahoo.com](https://finance.yahoo.com/news/microchip-technology-raises-q3-revenue-215554959.html))

### Sales · FY2026–2027

sales +8.7%; source https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm; observed 2026-05-21.

- FY2018: $4.0B 

- FY2019: $5.3B 

- FY2020: $5.3B 

- FY2021: $5.4B 

- FY2022: $6.8B 

- FY2023: $8.4B 

- FY2024: $7.6B 

- FY2025: $4.4B 

- FY2026: $4.7B 

- FY2027: $5.1B 

### Gross margin · FY2027

gross margin 60.2%; source https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm; observed 2026-05-21.

- FY2018: 60.8% 

- FY2019: 54.8% 

- FY2020: 61.5% 

- FY2021: 62.1% 

- FY2022: 65.2% 

- FY2023: 67.5% 

- FY2024: 65.4% 

- FY2025: 56.1% 

- FY2026: 57.7% 

- FY2027: 60.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductors; annual sales are USD 4.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm (filed 2026-05-21); FY2026: revenue 4713100000; grossProfit 2721100000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MCHP.US: Microchip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. It operates in two segments, Semiconductor Products and Technology Licensing. The company offers general-purpose 8-bit, 16-bit, 32-bit, and 64-bit mixed-signal microcontrollers; 32-bit and 64-bit embedded mixed-signal microprocessors; and specialized mixed-signal microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human-machine interface, security, wired connectivity, and wireless connectivity applications. It also provides analog products, including power management, linear, mixed-signal, high voltage, thermal management, discrete diodes and MOSFETs, radio frequency (RF), gate drivers, safety, security, timing, application-specific standard products, USB, Ethernet, wireless, and other interface products; field-programmable gate array (FPGA) products; and application development tools that enable system designers to program mixed-signal microcontroller, FPGA, and microprocessor products. In addition, the company offers memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random-access memory, and electrically erasable random-access memory for footprint devices. Further, it licenses its SuperFlash embedded flash and non-volatile memory technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate arrays, RF, analog, and neuromorphic compute products. Additionally, the company offers engineering services; wafer foundry, assembly, and test subcontracting manufacturing services; and timing systems, application-specific integrated circuits, and products for aerospace applications. The company was incorporated in 1989 and is headquartered in Chandler, Arizona.

### Why customers stay

Margins ranged from 56.1% to 65.4% during 2024–26; it earns 13.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2024: grossProfit / revenue = 65.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2025: grossProfit / revenue = 56.1%.

- Source: https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm (filed 2026-05-21); FY2026: grossProfit / revenue = 57.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); 10-year return on capital observations [[2018,0.32852631578947367],[2019,0.08403826017388849],[2020,0.07950510498703788],[2021,0.13390485390002416],[2022,0.24215890304088744],[2023,0.38613513950044587],[2024,0.36385827553039635],[2025,0.03642183097259782],[2026,0.0819090402226483],[2027,0.1344719172942244]]; median 0.13418838559712426. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 182.1 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2017: growth capex 0; upkeep 75310000; owner earnings 558537000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2018: growth capex 0; upkeep 206800000; owner earnings 664500000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2019: growth capex 0; upkeep 228900000; owner earnings 1003400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2020: growth capex 0; upkeep 67600000; owner earnings 1718600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2021: growth capex 0; upkeep 92600000; owner earnings 1410100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2022: growth capex 0; upkeep 370100000; owner earnings 2058900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2023: growth capex 0; upkeep 486200000; owner earnings 2749900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2024: growth capex 0; upkeep 285100000; owner earnings 2501300000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); FY2025: growth capex 0; upkeep 126000000; owner earnings 623600000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm (filed 2026-05-21); FY2026: growth capex 0; upkeep 91100000; owner earnings 800400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); Dividend observations: [[2017,315400000],[2018,337500000],[2019,344400000],[2020,350100000],[2021,388300000],[2022,503800000],[2023,695300000],[2024,911500000],[2025,975700000],[2026,1092500000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm (filed 2026-05-21); FY2026: cash repurchases 182100000 USD.

### Are managers owners

Insiders own 1.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MCHP.US SharesStats.PercentInsiders = 1.7870000000000001 percentage points; cache date 2026-10-16.

### What could break it

"We are highly dependent on foreign sales, suppliers, and operations" (SEC filing, May 2026)

- Source: https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm (filed 2026-05-21); We are highly dependent on foreign sales, suppliers, and operations

### What the price says

The price assumes cash profits grow 10.2% yearly over ten years; actual growth was 2.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-21); Ten-year compound average after fade. Initial solved rate 0.13318221271381836. Price 74.26; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 1.1716582336706531 → FY2026 1.4680851063829787. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $30.28 per share

- 2016-11: $33.09 per share

- 2016-12: $32.08 per share

- 2017-01: $33.68 per share

- 2017-02: $36.26 per share

- 2017-03: $36.89 per share

- 2017-04: $37.79 per share

- 2017-05: $41.65 per share

- 2017-06: $38.59 per share

- 2017-07: $40.02 per share

- 2017-08: $43.40 per share

- 2017-09: $44.89 per share

- 2017-10: $47.40 per share

- 2017-11: $43.50 per share

- 2017-12: $43.94 per share

- 2018-01: $47.61 per share

- 2018-02: $44.47 per share

- 2018-03: $45.68 per share

- 2018-04: $41.83 per share

- 2018-05: $48.69 per share

- 2018-06: $45.48 per share

- 2018-07: $46.72 per share

- 2018-08: $43.02 per share

- 2018-09: $39.46 per share

- 2018-10: $32.89 per share

- 2018-11: $37.50 per share

- 2018-12: $35.96 per share

- 2019-01: $40.19 per share

- 2019-02: $43.44 per share

- 2019-03: $41.48 per share

- 2019-04: $49.95 per share

- 2019-05: $40.02 per share

- 2019-06: $43.35 per share

- 2019-07: $47.21 per share

- 2019-08: $43.17 per share

- 2019-09: $46.46 per share

- 2019-10: $47.15 per share

- 2019-11: $47.27 per share

- 2019-12: $52.36 per share

- 2020-01: $48.74 per share

- 2020-02: $45.36 per share

- 2020-03: $33.90 per share

- 2020-04: $43.87 per share

- 2020-05: $48.01 per share

- 2020-06: $52.66 per share

- 2020-07: $50.87 per share

- 2020-08: $54.85 per share

- 2020-09: $51.38 per share

- 2020-10: $52.54 per share

- 2020-11: $67.20 per share

- 2020-12: $69.06 per share

- 2021-01: $68.06 per share

- 2021-02: $76.32 per share

- 2021-03: $77.61 per share

- 2021-04: $75.15 per share

- 2021-05: $78.48 per share

- 2021-06: $74.87 per share

- 2021-07: $71.56 per share

- 2021-08: $78.68 per share

- 2021-09: $76.75 per share

- 2021-10: $74.09 per share

- 2021-11: $83.43 per share

- 2021-12: $87.06 per share

- 2022-01: $77.48 per share

- 2022-02: $70.33 per share

- 2022-03: $75.14 per share

- 2022-04: $65.20 per share

- 2022-05: $72.65 per share

- 2022-06: $58.08 per share

- 2022-07: $68.86 per share

- 2022-08: $65.25 per share

- 2022-09: $61.03 per share

- 2022-10: $61.74 per share

- 2022-11: $79.19 per share

- 2022-12: $70.25 per share

- 2023-01: $77.62 per share

- 2023-02: $81.03 per share

- 2023-03: $83.78 per share

- 2023-04: $72.99 per share

- 2023-05: $75.26 per share

- 2023-06: $89.59 per share

- 2023-07: $93.94 per share

- 2023-08: $81.84 per share

- 2023-09: $78.05 per share

- 2023-10: $71.29 per share

- 2023-11: $83.44 per share

- 2023-12: $90.18 per share

- 2024-01: $85.18 per share

- 2024-02: $84.14 per share

- 2024-03: $89.71 per share

- 2024-04: $91.98 per share

- 2024-05: $97.23 per share

- 2024-06: $91.50 per share

- 2024-07: $88.78 per share

- 2024-08: $82.16 per share

- 2024-09: $80.29 per share

- 2024-10: $73.37 per share

- 2024-11: $68.17 per share

- 2024-12: $57.35 per share

- 2025-01: $54.30 per share

- 2025-02: $58.86 per share

- 2025-03: $48.41 per share

- 2025-04: $46.08 per share

- 2025-05: $58.04 per share

- 2025-06: $70.37 per share

- 2025-07: $67.59 per share

- 2025-08: $65.00 per share

- 2025-09: $64.22 per share

- 2025-10: $62.42 per share

- 2025-11: $53.58 per share

- 2025-12: $63.72 per share

- 2026-01: $75.92 per share

- 2026-02: $74.64 per share

- 2026-03: $64.61 per share

- 2026-04: $92.91 per share

- 2026-05: $94.65 per share

- 2026-06: $91.20 per share

- 2026-07: $74.29 per share

- 2026-08: $73.45 per share

- 2026-09: $77.77 per share

- 2026-10: $74.16 per share

## Annual estimated value (USD per share)

- FY2017: low $21.02 per share, central $23.56 per share, high $26.93 per share

- FY2018: low $24.52 per share, central $27.31 per share, high $31.03 per share

- FY2019: low $22.59 per share, central $25.62 per share, high $29.64 per share

- FY2020: low $21.68 per share, central $24.59 per share, high $28.47 per share

- FY2021: low $20.92 per share, central $23.76 per share, high $27.54 per share

- FY2022: low $34.48 per share, central $39.19 per share, high $45.46 per share

- FY2023: low $50.08 per share, central $56.96 per share, high $66.13 per share

- FY2024: low $49.92 per share, central $56.76 per share, high $65.87 per share

- FY2025: low $28.30 per share, central $32.03 per share, high $36.99 per share

- FY2026: low $28.79 per share, central $32.72 per share, high $37.96 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:35:51.072Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/827054/000082705426000016/mchp-20260331.htm); period 2026-03-31, filed 2026-05-21.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.