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Microchip Technology Earnings: What To Look For From MCHP

StockStory - Wed Nov 1, 2023

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Analog chipmaker Microchip Technology (NASDAQ:MCHP) will be reporting results tomorrow after the bell. Here's what you need to know.

Last quarter Microchip Technology reported revenues of $2.29 billion, up 16.6% year on year, missing analyst expectations by 0.03%. It was a weak quarter for the company, with revenue guidance for the next quarter below Wall Street's expectations.

Is Microchip Technology buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Microchip Technology's revenue to grow 9.32% year on year to $2.27 billion, slowing down from the 25.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.62 per share.

Microchip Technology Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 0.55%.

Looking at Microchip Technology's peers in the analog semiconductors segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Impinj's revenues decreased 4.78% year on year, beating analyst estimates by 0.46%, and Texas Instruments reported revenue decline of 13.5% year on year, missing analyst estimates by 1.22%. Impinj traded up 20.7% on the results, Texas Instruments was down 4.3%.

Read our full analysis of Impinj's results here and Texas Instruments's results here.

The fears around raising interest rates have been putting pressure on tech stocks, and while some of the analog semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 8.81% over the last month. Microchip Technology is down 7.1% during the same time, and is heading into the earnings with analyst price target of $95.6, compared to share price of $71.3.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.

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