8629

Microchip Technology Q1 Earnings: What To Look For From MCHP


Radek Strnad /
2022/05/06 7:10 am EDT
Add to Watchlist

Analog chipmaker Microchip Technology (NASDAQ:MCHP) will be reporting earnings next Monday after market hours. Here's what you need to know.

Last quarter Microchip Technology reported revenues of $1.75 billion, up 29.9% year on year, in line with analyst expectations. It was a solid quarter for the company, with a meaningful improvement in operating margin and revenue guidance for the next quarter beating analysts' estimates.

Is Microchip Technology buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Microchip Technology's revenue to grow 24% year on year to $1.82 billion, improving on the 10.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.25 per share.

Microchip Technology Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.06%.

Looking at Microchip Technology's peers in the analog semiconductors segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. NXP Semiconductors delivered top-line growth of 22.1% year on year, beating analyst estimates by 1.04% and Texas Instruments reported revenues up 14.3% year on year, exceeding estimates by 3.62%. NXP Semiconductors traded flat on the results, and Texas Instruments was down 7.51%. Read our full analysis of NXP Semiconductors's results here and Texas Instruments's results here.

Tech stocks have had a rocky start in 2022 and while some of the semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 3.61% over the last month. Microchip Technology is down 1.12% during the same time, and is heading into the earnings with analyst price target of $93.3, compared to share price of $68.49.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.