Microchip Technology Operating Margin vs. Price To Book

MCHP Stock  USD 58.34  0.13  0.22%   
Based on the key profitability measurements obtained from Microchip Technology's financial statements, Microchip Technology may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess Microchip Technology's ability to earn profits and add value for shareholders.

Microchip Technology Operating Profit Margin

0.34

100%
At this time, Microchip Technology's Days Sales Outstanding is relatively stable compared to the past year. As of 12/29/2024, Sales General And Administrative To Revenue is likely to grow to 0.17, while Operating Cash Flow Sales Ratio is likely to drop 0.28. At this time, Microchip Technology's Change To Netincome is relatively stable compared to the past year. As of 12/29/2024, Net Income Per Share is likely to grow to 3.69, while Non Operating Income Net Other is likely to drop (2.3 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.450.6544
Way Down
Slightly volatile
Net Profit Margin0.20.2498
Significantly Down
Slightly volatile
Operating Profit Margin0.180.3368
Way Down
Slightly volatile
Pretax Profit Margin0.230.3099
Way Down
Slightly volatile
Return On Assets0.10.1201
Significantly Down
Pretty Stable
Return On Equity0.30.2864
Sufficiently Up
Slightly volatile
For Microchip Technology profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Microchip Technology to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Microchip Technology utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Microchip Technology's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Microchip Technology over time as well as its relative position and ranking within its peers.
  

Microchip Technology's Revenue Breakdown by Earning Segment

Check out Correlation Analysis.
To learn how to invest in Microchip Stock, please use our How to Invest in Microchip Technology guide.
Is Semiconductors & Semiconductor Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Microchip Technology. If investors know Microchip will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Microchip Technology listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.88)
Dividend Share
1.795
Earnings Share
1.44
Revenue Per Share
10.211
Quarterly Revenue Growth
(0.48)
The market value of Microchip Technology is measured differently than its book value, which is the value of Microchip that is recorded on the company's balance sheet. Investors also form their own opinion of Microchip Technology's value that differs from its market value or its book value, called intrinsic value, which is Microchip Technology's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Microchip Technology's market value can be influenced by many factors that don't directly affect Microchip Technology's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Microchip Technology's value and its price as these two are different measures arrived at by different means. Investors typically determine if Microchip Technology is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Microchip Technology's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Microchip Technology Price To Book vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Microchip Technology's current stock value. Our valuation model uses many indicators to compare Microchip Technology value to that of its competitors to determine the firm's financial worth.
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Microchip Technology is rated below average in operating margin category among its peers. It is regarded fifth in price to book category among its peers fabricating about  39.21  of Price To Book per Operating Margin. At this time, Microchip Technology's Operating Profit Margin is relatively stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Microchip Technology by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Microchip Price To Book vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Microchip Technology

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.13 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Price to Book (P/B) ratio is used to relate a company book value to its current market price. A high P/B ratio indicates that investors expect executives to generate more returns on their investments from a given set of assets. Book value is the accounting value of assets minus liabilities.

Microchip Technology

P/B

 = 

MV Per Share

BV Per Share

 = 
4.99 X
Price to Book ratio is mostly used in financial services industries where assets and liabilities are typically represented by dollars. Although low Price to Book ratio generally implies that the firm is undervalued, it is often a good indicator that the company may be in financial or managerial distress and should be investigated more carefully.

Microchip Price To Book Comparison

4.9912.7111.5610.105.78100%
Microchip Technology is currently under evaluation in price to book category among its peers.

Microchip Technology Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Microchip Technology, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Microchip Technology will eventually generate negative long term returns. The profitability progress is the general direction of Microchip Technology's change in net profit over the period of time. It can combine multiple indicators of Microchip Technology, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-3.5 M-3.7 M
Operating Income2.6 B2.7 B
Income Before Tax2.4 B2.5 B
Total Other Income Expense Net-205.1 M-194.8 M
Net Income1.9 BB
Income Tax Expense459 M481.9 M
Net Income Applicable To Common Shares2.6 B2.7 B
Net Income From Continuing Ops1.9 BB
Non Operating Income Net Other-2.2 M-2.3 M
Interest Income7.6 M11.4 M
Net Interest Income-190.7 M-200.2 M
Change To Netincome441.8 M463.9 M
Net Income Per Share 3.52  3.69 
Income Quality 1.52  1.89 
Net Income Per E B T 0.81  0.78 

Microchip Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Microchip Technology. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Microchip Technology position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Microchip Technology's important profitability drivers and their relationship over time.

Use Microchip Technology in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Microchip Technology position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Microchip Technology will appreciate offsetting losses from the drop in the long position's value.

Microchip Technology Pair Trading

Microchip Technology Pair Trading Analysis

The ability to find closely correlated positions to Microchip Technology could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Microchip Technology when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Microchip Technology - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Microchip Technology to buy it.
The correlation of Microchip Technology is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Microchip Technology moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Microchip Technology moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Microchip Technology can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Microchip Technology position

In addition to having Microchip Technology in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Additional Tools for Microchip Stock Analysis

When running Microchip Technology's price analysis, check to measure Microchip Technology's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Microchip Technology is operating at the current time. Most of Microchip Technology's value examination focuses on studying past and present price action to predict the probability of Microchip Technology's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Microchip Technology's price. Additionally, you may evaluate how the addition of Microchip Technology to your portfolios can decrease your overall portfolio volatility.