- Microchip’s 1Q net sales forecast is between $1.02 billion to $1.07 billion, surpassing the estimated $983.5 million.
- For the fourth quarter, adjusted earnings per share (EPS) were 11 cents, down from 57 cents year-over-year, yet slightly above the estimated 10 cents.
- The adjusted gross margin for the fourth quarter was 52%, a decrease from 60.3% last year, and slightly below the estimated 53.1%.
- Research and Development expenses increased by 6.2% year-over-year, totaling $255.2 million, which is slightly below the estimated $259 million.
- Fourth quarter net sales were $970.5 million, marking a 27% decrease year-over-year but exceeded the estimate of $962.7 million.
- Analyst recommendations for Microchip include 17 buys, 5 holds, and 1 sell.
Microchip Technology on Smartkarma
Analysts on Smartkarma have provided insightful coverage on Microchip Technology, shedding light on the company’s current challenges and opportunities. Baptista Research, in their report “Microchip Technology: These Are The 5 Biggest Challenges In Its Path!”, highlighted the company’s Q3 Fiscal 2025 results showing a tough business environment due to inventory correction post-pandemic. The company reported a significant decline in net sales across all major regions and product categories, prompting a strategic restructuring plan to enhance performance.
Another report by Baptista Research, “Microchip Hits Pause on CHIPS Act Funds & Faces Big Challenges: A Red Flag For Investors?“, discussed the company’s second-quarter fiscal year 2025 financial results amidst macroeconomic challenges. Despite facing a sequential net sales decline, the analysts raised concerns over potential obstacles Microchip Technology may encounter, signaling caution for investors. Additionally, William Mann‘s bearish perspective in “2025 High Conviction Short: Microchip Technology Inc. (MCHP)” emphasized declining fundamentals, high valuation, geo-political risks, and operational challenges, suggesting a target price range and time horizon for a short position on MCHP stock.
A look at Microchip Technology Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 4 | |
| Growth | 2 | |
| Resilience | 3 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Microchip Technology Incorporated, a company specializing in microcontrollers and related products for embedded control applications, has received an overall positive outlook based on Smartkarma’s Smart Scores. With a solid score in Dividend and Resilience, Microchip Technology demonstrates a strong ability to maintain stability and return value to its investors over the long term. Although its scores in Value and Growth are more moderate, the company’s Momentum score suggests a certain degree of market interest and potential for future growth. This indicates a promising outlook for Microchip Technology in the coming years as it continues to innovate and expand its product offerings.
Microchip Technology‘s emphasis on producing microcontrollers, mixed-signal, and memory products for high-volume applications positions it as a key player in the tech industry. Additionally, its focus on linear/mixed-signal, power management, and thermal management products showcases a diversified product line catering to different market needs. With its favorable Smart Scores, Microchip Technology has laid a foundation for sustained growth and investor confidence in its long-term prospects amid a competitive technological landscape.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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