Microchip Technology, trading under the ticker MCHP, has introduced the MCPF1412, a cutting-edge 12A power module featuring a 16V VIN buck converter. This fully integrated point-of-load module is designed to enhance energy efficiency, providing an effective solution for power conversion with minimal energy loss.
The MCPF1412 supports both I2C and PMBus interfaces, which broadens its application potential across different systems. Its compact dimensions of 5.8 mm by 4.9 mm by 1.6 mm, along with a Land Grid Array package, result in a significant reduction of over 40% in board space compared to conventional discrete solutions. This streamlined design not only saves space but also improves reliability and lessens printed circuit board (PCB) switching and radio frequency (RF) noise.
By offering superior performance within a smaller footprint, the MCPF1412 is poised to set a new industry standard, reflecting Microchip's commitment to innovation in power management solutions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Microchip Technology Inc (MCHP, Financial) is $60.00 with a high estimate of $75.00 and a low estimate of $35.00. The average target implies an upside of 43.09% from the current price of $41.93. More detailed estimate data can be found on the Microchip Technology Inc (MCHP) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, Microchip Technology Inc's (MCHP, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Microchip Technology Inc (MCHP, Financial) in one year is $47.41, suggesting a upside of 13.07% from the current price of $41.93. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Microchip Technology Inc (MCHP) Summary page.
MCHP Key Business Developments
Release Date: February 06, 2025
- Net Sales: $1.026 billion, down 11.8% sequentially.
- Non-GAAP Gross Margin: 55.4%, including $42.7 million in capacity and utilization charges.
- Operating Expenses: 34.9% of net sales.
- Operating Margin: 20.5% on a non-GAAP basis.
- Non-GAAP Net Income: $107.3 million.
- Non-GAAP Earnings Per Share: $0.20.
- GAAP Gross Margin: 54.7%.
- GAAP Net Loss: $53.6 million, resulting in a loss per share of $0.10.
- Cash Flow from Operating Activities: $271.5 million.
- Adjusted Free Cash Flow: $244.6 million.
- Inventory: $1.356 billion, 266 days of inventory.
- Cash and Total Investment Position: $586 million.
- Capital Expenditures: $81 million in the December quarter.
- Adjusted EBITDA: $274.9 million, 26.8% of net sales.
- Net Debt to Adjusted EBITDA: 3.78 at December 31, 2024.
- Guidance for March Quarter Net Sales: Between $920 million and $1 billion.
- Guidance for Non-GAAP Gross Margin: Between 52% and 54% of sales.
- Guidance for Non-GAAP Operating Profit: Between 11.5% and 16.3% of sales.
- Guidance for Non-GAAP Diluted EPS: Between $0.05 and $0.15.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Microchip Technology Inc (MCHP, Financial) has introduced a new generation of 64-bit RISC-V processors with advanced AI capabilities, which have received strong initial customer response.
- The company has expanded its Wi-Fi portfolio with 20 new products, enhancing secure wireless connectivity and accelerating time to market.
- Microchip Technology Inc (MCHP) achieved the highest level of space certification for its radiation-hardened chips, strengthening its position in critical space missions.
- The company is actively working on a nine-point plan to improve efficiency and performance, including resizing its manufacturing footprint and reducing inventory levels.
- Microchip Technology Inc (MCHP) is committed to maintaining strong customer relationships, focusing on the top 1,000 customers to enhance support and design opportunities.
Negative Points
- Net sales for the December quarter were down 11.8% sequentially and 41.9% year-over-year, indicating significant revenue challenges.
- The company is facing a high inventory level, with 266 days of inventory at the end of December 2024, well above the target of 130 to 150 days.
- Operating expenses increased in the December quarter and are expected to rise further, impacting profitability.
- Microchip Technology Inc (MCHP) is experiencing broad-based weakness across all major geographies and product lines, including microcontrollers and analog.
- The company has lowered its fulfillment margins for distributors, which may impact distributor relationships and sales incentives.
