In the latest trading session, Microchip Technology (MCHP) closed at $64.39, marking a -1.2% move from the previous day. This move lagged the S&P 500’s daily gain of 0.21%. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq gained 0.02%.
Prior to today’s trading, shares of the chipmaker had lost 18.31% over the past month. This has lagged the Computer and Technology sector’s loss of 13.55% and the S&P 500’s loss of 8.08% in that time.
Wall Street will be looking for positivity from Microchip Technology as it approaches its next earnings report date. This is expected to be May 9, 2022. In that report, analysts expect Microchip Technology to post earnings of $1.25 per share. This would mark year-over-year growth of 34.41%. Our most recent consensus estimate is calling for quarterly revenue of $1.82 billion, up 24.06% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Microchip Technology. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.16% lower. Microchip Technology is currently a Zacks Rank #3 (Hold).
Investors should also note Microchip Technology’s current valuation metrics, including its Forward P/E ratio of 12.53. Its industry sports an average Forward P/E of 17.55, so we one might conclude that Microchip Technology is trading at a discount comparatively.
It is also worth noting that MCHP currently has a PEG ratio of 0.62. 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. The Semiconductor – Analog and Mixed industry currently had an average PEG ratio of 0.66 as of yesterday’s close.
The Semiconductor – Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 55, which puts it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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