Microchip Technology Incorporated (NASDAQ: MCHP) stock fell -5.15% on Wednesday to $73.62 against a previous-day closing price of $77.62. With 7.79 million shares changed hands, the volume of the stock remained heavier than its average volume of 4.6 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $75.50 whereas the lowest price it dropped to was $72.56. The 52-week range on MCHP shows that it touched its highest point at $87.76 and its lowest point at $54.33 during that stretch. It currently has a 1-year price target of $94.23. With its current market cap of 40.55 billion, MCHP has annualized dividend of $1.53 while the current yield stands at 2.08%. Beta for the stock currently stands at 1.55.
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Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MCHP was down-trending over the past week, with a drop of -3.89%, but this was down by -1.01% over a month. Three-month performance dropped to -9.33% while six-month performance rose 1.90%. The stock gained 9.88% in the past year, while it has gained 4.80% so far this year. A look at the trailing 12-month EPS for MCHP yields 3.70 with Next year EPS estimates of 6.49. For the next quarter, that number is 1.64. This implies an EPS growth rate of 251.90% for this year and 2.72% for next year. EPS is expected to grow by 13.80% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 44.30%.
Float and Shares Shorts:
At present, 549.20 million MCHP shares are outstanding with a float of 538.57 million shares on hand for trading. On Apr 27, 2023, short shares totaled 18.9 million, which was 3.45% higher than short shares on Mar 30, 2023. In addition to Mr. Stephen Sanghi as the firm’s Exec. Chair, Mr. Ganesh Moorthy serves as its CEO, Pres & Director.
Through their ownership of 92.73% of MCHP’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 57.76% of MCHP, in contrast to 34.85% held by mutual funds. Shares owned by individuals account for 2.10%. As the largest shareholder in MCHP with 11.64% of the stake, The Vanguard Group, Inc. holds 63,780,918 shares worth 63,780,918. A second-largest stockholder of MCHP, BlackRock Fund Advisors, holds 30,951,103 shares, controlling over 5.65% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in MCHP, holding 24,271,574 shares or 4.43% stake. With a 3.11% stake in MCHP, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 17,008,936 shares are owned by the mutual fund manager. The Dodge & Cox Stock Fund, which owns about 2.72% of MCHP stock, is the second-largest Mutual Fund holder. It holds 14,913,966 shares valued at 1.09 billion. Vanguard 500 Index Fund holds 2.35% of the stake in MCHP, owning 12,857,785 shares worth 938.49 million.
An Overview of Recent Financials:
Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, MCHP reported revenue of $1.96B and operating income of $684.40M. The EBITDA in the recently reported quarter was $943.30M and diluted EPS was $0.90.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MCHP since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With MCHP analysts setting a high price target of $125.00 and a low target of $76.00, the average target price over the next 12 months is $95.36. Based on these targets, MCHP could surge 69.79% to reach the target high and rise by 3.23% to reach the target low. Reaching the average price target will result in a growth of 29.53% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.
Dividends & Yield:
In terms of dividends, MCHP has a current ratio of $1.53, which is $1.53 over the trailing 12-months, while a dividend of $0.83 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and MCHP currently yields $1.86. In the past year, MCHP’s dividend yield has been $1.86, but when looking at the stock over the past five years, its yield has been $1.46. Accordingly, MCHP has a current buyback yield of $2.12. This was $2.12 for the TTM.
Summary of Insider Activity:
Insiders traded MCHP stock several times over the past three months with 5 Buys and 0 Sells. In these transactions, 1,925 shares were bought while 0 shares were sold. The number of buy transactions has increased to 66 while that of sell transactions has risen to 62 over the past year. The total number of shares bought during that period was 282,525 while 111,485 shares were sold.