Microchip Technology Incorporated
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Microchip's cyclical recovery is unmistakable—Q1 FY2027 revenue of $1.48B grew 38% YoY with operating income of $337M versus just $32M in the year-ago quarter, and the company has beaten EPS estimates in five of the last six reported periods.
However, the stock trades at 102.3x trailing P/E—roughly 70% above the peer median of 60.3x—and sits below both its 50-day ($75.76) and 200-day ($79.44) moving averages with a negative MACD histogram of -0.58 as of 16 Oct, signaling the market has not yet rewarded the fundamental improvement. With FY2026 operating margin still at just 10.4% versus the FY2023 peak of 36.9%, net insider selling of $60.4M over 24 months, and a negligible smart-money score of 0.03 as of the quarter ended 30 Jun, the turnaround lacks confirmation from both technicals and sophisticated capital at current prices.
What could go wrong
- Valuation compression on depressed earnings. At 102.3x trailing P/E versus a peer median of 60.3x, any disappointment in the pace of margin recovery could trigger a sharp de-rating, particularly with the stock already below both key moving averages as of 16 Oct.
- Leveraged balance sheet. Total debt of $5.54B against stockholders' equity of $6.43B as of FY2026 constrains financial flexibility and amplifies downside if the cyclical recovery stalls.
- Insider and institutional caution. Insiders are net sellers of $60.4M over 24 months with zero open-market acquisitions, and the smart-money score of 0.03 as of the quarter ended 30 Jun is among the lowest in the tracked history.
- Margin recovery far from complete. FY2026 operating margin of 10.4% and gross margin of 57.7% remain well below FY2023 peaks of 36.9% and 67.5% respectively, leaving substantial execution risk before normalized earnings power is restored.
What would change my mind
Where this comes from: Q1 FY27 and Q1 FY26 results · peer comparison · technicals, 16 Oct · FY23 and FY26 fundamentals. Orin's read on MCHP; not advice.
How has the share price moved?
Up 24.2% over twelve months, from $64.55 on 27 Oct 2025 to $80.17 at the Tue 27 Oct 2026 close. Its highest close in that time was $102.92 on 6 May 2026; the last close is 22.1% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 31.4M, on 26 Jun 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All MCHP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $5.8B | 0.1% |
| Vanguard Capital Management | $3.2B | 0.1% |
| Vanguard Portfolio Management | $3.0B | 0.1% |
| State Street | $2.6B | 0.1% |
| Invesco | $2.3B | 0.2% |
| Geode Capital Management | $1.4B | 0.1% |
| Bank of America | $1.1B | 0.1% |
| Norges Bank | $828.0M | 0.1% |
| Morgan Stanley | $810.1M | 0.0% |
| Goldman Sachs Group | $677.9M | 0.1% |
117 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 543 Form 4 filings; open-market trades net −$60.4M. Of the 50 on hand, 0 were open-market purchases and 2 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about MCHP
Orin answers questions about MCHP from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 101× its last 12 months of profit (Thu 5 Nov close); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 101× | — | 46.1× |
| P/S | 6.28×near usual | 6.08× | — |
| EV/EBITDA | 21.3×above usual | 17.1× | — |
| P/B | 5.3×below usual | 7.0× | — |
- P/E: no usual level — it ran from 20.6× to 239× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $111 (from $88 to $135) — 38% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$111
$88 – $135 · +38% against the last close
- 15 buy or overweight
- 6 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 101× its last 12 months of profit; the middle P/E of the 8 companies it is compared to that made a profit is 50.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| MCHPMicrochip Technology Incorporated | $35B | 101× | 21.3× | 62.7% | 14.0% | 12% |
| ADIAnalog Devices, Inc. | $206B | 50.2× | 30.3× | 65.8% | 29.8% | 12% |
| LSCCLattice Semiconductor Corporation | $15B | 391× | 165× | 67.7% | 5.6% | 5% |
| MPWRMonolithic Power Systems, Inc. | $60B | 73.9× | 56.1× | 55.2% | 24.4% | 22% |
| NXPINXP Semiconductors N.V. | $64B | 19.8× | 14.2× | 56.3% | 23.4% | 29% |
| ONON Semiconductor Corporation | $31B | 49.8× | 20.5× | 37.4% | 10.2% | 8% |
| STMSTMicroelectronics N.V. | $43B | 91.8× | 19.2× | 34.3% | 3.5% | 3% |
| TXNTexas Instruments Incorporated | $282B | 40.0× | 26.6× | 60.2% | 34.3% | 41% |
| VSHVishay Intertechnology, Inc. | $3B | 31.6× | 6.4× | 22.2% | 2.4% | 4% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 101× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now101×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $10 a share — 87% below the $79.34 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $10 | 87% below $79.34 |
| Levered | $11 | 86% below $79.34 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.