In the latest trading session, Microchip Technology (MCHP) closed at $86.93, marking a +0.65% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.62%. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.03%.
Heading into today, shares of the chipmaker had gained 2.93% over the past month, outpacing the Computer and Technology sector’s loss of 1.01% and the S&P 500’s gain of 0.39% in that time.
Investors will be hoping for strength from Microchip Technology as it approaches its next earnings release. On that day, Microchip Technology is projected to report earnings of $1.17 per share, which would represent year-over-year growth of 44.44%. Meanwhile, our latest consensus estimate is calling for revenue of $1.75 billion, up 29.11% from the prior-year quarter.
MCHP’s full-year Zacks Consensus Estimates are calling for earnings of $4.42 per share and revenue of $6.73 billion. These results would represent year-over-year changes of +33.94% and +23.77%, respectively.
Investors might also notice recent changes to analyst estimates for Microchip Technology. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.36% higher within the past month. Microchip Technology is currently a Zacks Rank #2 (Buy).
Looking at its valuation, Microchip Technology is holding a Forward P/E ratio of 19.56. This represents a discount compared to its industry’s average Forward P/E of 25.43.
We can also see that MCHP currently has a PEG ratio of 1.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Semiconductor – Analog and Mixed stocks are, on average, holding a PEG ratio of 1.62 based on yesterday’s closing prices.
The Semiconductor – Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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