Key Stats for Microchip Technology Incorporated Stock
- Past-Week Performance: 0.87%
- 52-Week Range: $34 to $77
- Valuation Model Target Price: $109
- Implied Upside: 49% over 2.2 years
What Happened?
Microchip Technology Incorporated (MCHP) rose about 6% during the first week of January following a company-issued fiscal third-quarter sales outlook update.
The move followed Microchip lifting fiscal 2025 Q3 net sales guidance to about $1.19 billion, above its prior $1.11–$1.15 billion range.
The outlook change mattered because the stock remains highly sensitive to revenue inflection signals after an extended semiconductor inventory correction.
Importantly, Microchip stock reacted to near-term revenue changes, with no shifts in demand trends or long-term outlook.
The move reflects a recalibration of expectations rather than a deterioration in the underlying business, following improving bookings and backlog visibility.
Is Microchip Technology Incorporated Fairly Valued Right Now?
Under the valuation model shown, the stock is modeled using:
- Revenue Growth: 13.9%
- Operating Margins: 33.4%
- Exit P/E Multiple: 30.7x
The valuation model through fiscal 2028 applies conditional revenue growth, margin normalization, and exit multiple assumptions to Microchip Technology.
The model assumes 13.9% revenue CAGR, 33.4% operating margins, and a 30.7x exit P/E multiple.
Based on these inputs, the model estimates a $108.71 target price, implying 48.6% total return and 19.8% annualized upside.
Achieving this outcome depends on sustained booking recovery, improved factory utilization, margin normalization, and effective scaling across analog and embedded product lines.
The current valuation reflects execution risk and earnings sensitivity, meaning Microchip stock may remain volatile if assumptions fail to materialize.
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