Microchip MCHP shares have lost 32.8% in the year-to-date period, underperforming the Zacks Semiconductor – Analog and Mixed industry and the broader Zacks Computer & Technology sector’s decline of 22.7% and 17.1%, respectively.

MCHP shares have lagged its industry peers, including Analog Devices ADI, Semtec Corporation SMTC and MACOM Technology Solutions MTSI, over the same time frame.

Analog Devices, Semtec Corporation and Macom Technology Solutions shares have plunged 18.7%, 26.6% and 58.8%, respectively.

Microchip shares have been suffering from stifling prospects with broad-based weakness across multiple product lines, including microcontrollers, analog, and FPGAs. The company continues to navigate a significant inventory correction post-COVID super-cycle, with inventory days rising to 266, above its target of 130-150 days. However, Microchip is increasingly focused on expanding its portfolio to boost its long-term growth prospects.

Microchip Technology Incorporated Price and Consensus

Microchip Technology Incorporated price-consensus-chart | Microchip Technology Incorporated Quote

Microchip Prospects to Benefit From Expanding Portfolio

On Friday last week, Microchip announced that its radiation-hardened power MOSFET family now meets the JANSF qualification for up to 300 Krad Total Ionizing Dose, a crucial development for space and aerospace applications, signaling Microchip’s strong foothold in defense and aerospace sectors.

On Wednesday last week, Microchip launched the BR235 and BR235D series of 25A QPL hermetically sealed electromechanical power relays that meet the requirements of MIL-PRF-83536 specification and ISO-9001 certification. These devices are designed for mission-critical applications, reinforcing the company’s position in the military and space sectors, where reliability and long-term performance are paramount.

In March, Microchip announced that PolarFire SoC FPGAs have earned AEC-Q100 qualification for automotive applications, marking a key step in the company’s automotive strategy. These chips are designed to meet the rigorous standards of the automotive sector and offer a low-power, high-reliability solution in harsh environments. This could be pivotal in supporting Microchip’s increasing penetration into the automotive electronics market.

MCHP is addressing the growing demand for advanced power management solutions with its MCP16701 PMIC, aimed at high-performance applications such as AI, industrial computing, and data centers. This integrated solution helps reduce component count and board space, offering substantial cost-saving advantages for customers.

Microchip’s diverse and expanding portfolio is positioning the company to capitalize on high-growth industries, including automotive, aerospace, and power management. Design wins, particularly in the industrial, aerospace, and automotive sectors, with innovative product developments like the 64-bit RISC-V processors and advanced Wi-Fi solutions is a key catalyst.

MCHP’s Earnings to Decline Y/Y

For the fourth quarter of fiscal 2025, Microchip’s non-GAAP earnings per share are expected between 5 cents and 15 cents. The Zacks Consensus Estimate for earnings is pegged at 10 cents per share, unchanged over the past 30 days, indicating an 82.5% year-over-year decline. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

MCHP projects revenues between $920 million and $1 billion. The Zacks Consensus Estimate for revenues is pegged at $961.07 million, suggesting a decline of 27.51% year over year.

Zacks Rank

MCHP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Analog Devices, Inc. $(ADI)$ : Free Stock Analysis Report

Microchip Technology Incorporated $(MCHP)$ : Free Stock Analysis Report

Semtech Corporation $(SMTC)$ : Free Stock Analysis Report

MACOM Technology Solutions Holdings, Inc. (MTSI) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research