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Here's Why Microchip Technology (MCHP) is a Strong Value Stock

Zacks Equity Research
·2-min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

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Microchip Technology (MCHP)

Microchip Technology Inc. develops and manufactures microcontrollers, memory and analog and interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks.

MCHP is a Zacks Rank #2 (Buy) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 12.9X for the current fiscal year compared to the Semiconductor - Analog and Mixed industry's P/E of 18X. Additionally, MCHP has a PEG Ratio of 0.8 and a Price/Cash Flow ratio of 12.2X. Value investors should also note MCHP's Price/Sales ratio of 5.4X.

Many value investors pay close attention to a company's earnings as well. For MCHP, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $6.00 per share for 2023. Per share MCHP boasts an average earnings surprise of 3.1%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding MCHP to their portfolios.

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Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research