Microchip Technology Incorporated

MCP.DE

Semiconductors · Technology

Price

€70.74

-0.49 (-0.69%)

Market Cap

€38.35B

Exchange

Frankfurt Stock Exchange

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−3.2% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 563.3M (2022) → 545.2M (2026)

Microchip Technology makes tiny computer chips called microcontrollers and microprocessors. These chips act like small brains inside everyday products — things like car dashboards, factory machines, medical devices, and home appliances. The company sells to thousands of manufacturers across many industries, making it one of the largest suppliers of microcontrollers in the world.

Microchip earns money by selling chips and related software tools directly to electronics manufacturers. It operates globally, with major customers in North America, Europe, and Asia, and generates several billion dollars in annual revenue. The company's wide range of products and deep customer relationships make it costly for buyers to switch suppliers, which is a key competitive advantage. However, the semiconductor industry is cyclical, and Microchip is currently working through a significant inventory correction where customers are buying less because they over-ordered chips during recent supply shortages — this remains the main near-term risk to its financial performance.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+34.6% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+175.9% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$1.1B/ year

↑ Rising (+10% vs prior year)

23.0% of revenue

1.5x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

2.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$0 cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Microchip Technology Incorporated grew revenue 35% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

61.0%

Premium pricing power — 61.0% gross margin

Operating Margin

17.1%

Healthy — 17.1% operating margin

ROCE

1.9%

Weak — 1.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+0.2%

Nearly flat sales (0.2% YoY)

EPS YoY

-91.4%

Earnings shrinking (-91.4% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

1046%

Turns 1046% of profit into real cash

FCF Margin

19.2%

Converts sales into free cash efficiently (19.2%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.85

Moderate — manageable debt (0.85)

Interest Cover

2.12x

Tight — interest eats into profit (2.1x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

307.5x

Expensive — P/E 307.5

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+282.7

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (307.5 → 24.9)

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Dividends

Dividend Yield

2.15%

Moderate income — 2.15% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

-6.9%

Dividend cut (-6.9% YoY) — warning sign

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