This story originally appeared on Zacks

In the latest trading session, Microchip Technology (MCHP) closed at $84.36, marking a -0.2% move from the previous day. This change was narrower than the S&P 500’s daily loss of 1.03%. At the same time, the Dow lost 1.48%, and the tech-heavy Nasdaq lost 0.24%.

Coming into today, shares of the chipmaker had gained 1.46% in the past month. In that same time, the Computer and Technology sector lost 4.42%, while the S&P 500 lost 0.62%.

Wall Street will be looking for positivity from Microchip Technology as it approaches its next earnings report date. On that day, Microchip Technology is projected to report earnings of $1.17 per share, which would represent year-over-year growth of 44.44%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.75 billion, up 29.11% from the year-ago period.

MCHP’s full-year Zacks Consensus Estimates are calling for earnings of $4.42 per share and revenue of $6.73 billion. These results would represent year-over-year changes of +33.94% and +23.77%, respectively.

Investors should also note any recent changes to analyst estimates for Microchip Technology. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.36% higher. Microchip Technology is currently a Zacks Rank #2 (Buy).

Investors should also note Microchip Technology’s current valuation metrics, including its Forward P/E ratio of 19.14. This represents a discount compared to its industry’s average Forward P/E of 24.26.

Investors should also note that MCHP has a PEG ratio of 1 right now. 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. Semiconductor – Analog and Mixed stocks are, on average, holding a PEG ratio of 1.58 based on yesterday’s closing prices.

The Semiconductor – Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 18, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MCHP in the coming trading sessions, be sure to utilize Zacks.com.

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Microchip Technology Incorporated (MCHP): Free Stock Analysis Report
 
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