Microchip Technology Q4 Earnings Report Preview: What To Look For

Radek Strnad /
2022/02/02 6:29 am EST
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Analog chipmaker Microchip Technology (NASDAQ:MCHP) will be reporting earnings tomorrow after market close. Here's what to expect.

Last quarter Microchip Technology reported revenues of $1.64 billion, up 25.9% year on year, in line with analyst expectations. It was a solid quarter for the company, with a very optimistic guidance for the next quarter and a meaningful improvement in gross margin.

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 24.2% year on year to $1.67 billion, improving on the 5.02% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $1.08 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 0.99%.

Looking at Microchip Technology 's peers in the analog semiconductors segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. MACOM Technology delivered top-line growth of 7.48% year on year, beating analyst estimates by 0.39% and Texas Instruments reported revenues up 18.5% year on year, exceeding estimates by 9.05%. MACOM Technology traded down 4.82% on results, Texas Instruments was up 2.35%. Read our full analysis of MACOM Technology's results here and Texas Instruments's results here.

Tech stocks have been facing declining investor sentiment in 2022 and while some of the analog semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 11.4% over the last month. Microchip Technology is down 9.77% during the same time, and is heading into the earnings with with analyst price target of $97.5, compared to share price of $78.94.

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.