Microchip Technology Incorporated MCHP
Microchip Technology's cyclical recovery is real but slow—FY2026 revenue of $4.71B grew 7.1% YoY after a 42% collapse in FY2025, and operating margin improved to 10.4% from 6.7%, yet both remain far below the FY2023 peak of $8.44B revenue and 36.9% operating margin. At 101.8x trailing P/E and 7.79x P/S—108% and 113% above peer medians—the stock prices in a rapid earnings rebound that has barely begun, while technically the shares at $73.50 trade below both the 50-day ($83.56) and 200-day ($76.65) moving averages with a negative MACD histogram.
Smart-money conviction is negligible at 0.0578 as of the quarter ended 2026-06-30, and insiders remain net sellers at $73.2M over 24 months with only RSU grants and no open-market purchases, so the turnaround lacks confirmation from those closest to the business at current prices.
What could go wrong
- Valuation compression. At 101.8x P/E and 7.79x P/S—108% and 113% above peer medians—any disappointment in the pace of earnings recovery could trigger a sharp de-rating, especially with the stock already below key moving averages.
- Cyclical demand weakness. FY2026 revenue of $4.71B is still 44% below the FY2023 peak of $8.44B; if automotive/industrial end markets deteriorate further, the recovery thesis stalls.
- Insider and smart-money divergence. Insiders are net sellers of $73.2M over 24 months with no open-market buys, and smart-money score is only 0.0578 as of 2026-06-30, suggesting those with closest visibility are not endorsing the recovery at current levels.
- Dilution from equity plan expansion. Shareholders approved a 12M-share equity incentive plan expansion on 2026-08-18, adding potential share-count pressure on per-share metrics.
What would change my mind
Where this comes from: FMP annual fundamentals + derived_metrics · derived_metrics · FMP annual fundamentals + derived_metrics · peer_relative. Orin's read on MCHP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All MCHP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $3.2B | 0.1% of fund |
| Vanguard Portfolio Management | $3.0B | 0.1% of fund |
| State Street | $2.6B | 0.1% of fund |
| Invesco | $2.3B | 0.2% of fund |
| Geode Capital Management | $1.4B | 0.1% of fund |
| Brasada Capital Management | $1.3B | 0.2% of fund |
115 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 533 Form 4 filings, net −$73.6M. 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 104.7× | — | 53.3× |
| EV/EBITDA | 27.4× | 17.1× | — |
| P/S | 8.01× | 6.08× | — |
| P/B | 6.4× | 7.0× | — |
Its P/E sits 80th percentile of its own last 5 years (+0.50σ from its own mean).
19.4%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.9B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$111
$88 – $135 · +50% against today's price
- 32 buy or overweight
- 14 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| MCHPMicrochip Technology Incorporated | $41B | 104.7× | 27.4× | 60.2% | 8.8% | 7% |
| ALABAstera Labs, Inc. Common Stock | $62B | 166.1× | 184.7× | 75.1% | 30.7% | 25% |
| ASXASE Technology Holding Co., Ltd. | $97B | 49.8× | 21.1× | 19.5% | 8.5% | 17% |
| CTSHCognizant Technology Solutions Corporation | $27B | 12.7× | 7.0× | 32.0% | 10.3% | 15% |
| HPEHewlett Packard Enterprise Company | $83B | 31.0× | 17.1× | 36.0% | 6.6% | 11% |
| KEYSKeysight Technologies, Inc. | $60B | 48.7× | 35.3× | 64.7% | 19.1% | 20% |
| STMSTMicroelectronics N.V. | $47B | 99.8× | 20.8× | 34.3% | 3.5% | 3% |
| TERTeradyne, Inc. | $61B | 53.1× | 41.7× | 59.3% | 25.8% | 38% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 110.1% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $9 | $87.84 · −89% | 2026-06-10 |
| Levered DCF | $13 | $87.84 · −86% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.