MCHP Value Scorecard - Microchip Technology

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

24/60

low-moderate value score

Earnings & returns

EPS Trend

1/5

Diluted EPS: $4.02 (2023), $3.48 (2024), -$0.01 (2025), $0.22 (2026). The latest figure is half the 2023 figure or less; the framework scores that as 1.

ROE Trend

4/5

ROE (net income / common equity): 34.4% (2023), 28.6% (2024), -0.0% (2025), 1.8% (2026). Median 15.2%, lowest -0.0%; the framework scores a median 15-20% as 4.

ROIC

1/5

ROIC of 3.7%: operating income of $490.10M divided by $13.23B of capital (total assets $14.37B minus current liabilities $1.14B), fiscal year to Mar 31, 2026, as filed in the 10-K (SEC EDGAR). The framework scores below 5% as 1.

Profit Margins

3/5

Net margin of 9.3%; the framework scores 5-10% as 3; gross margin 60.2%, operating margin 24.0%.

Balance sheet & cash

Debt-to-Equity

3/5

Debt-to-equity of 0.84; the framework scores 0.8-1.5 as 3 (total debt $5.40B, total cash $272.30M).

Free Cash Flow

1/5

Free cash flow (operating cash flow minus capital expenditure): $3.13B (2023), $2.61B (2024), $772.10M (2025), $871.00M (2026). The latest figure is half the 2023 figure or less; the framework scores that as 1.

Retained Earnings

2/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $5.76B (2023), $6.76B (2024), $5.78B (2025), $4.92B (2026). It ended at or below 2023; the framework scores that as 2.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $0.68 x (8.5 + 2 x 0.0) x (4.4 / 4.5) = $5.65 (EPS CAGR -74.9% floored at 0%; the formula returns a negative value below -4.25% growth). Current price $73.85; price is 1206.7% above the model value.

DCF Value

1/5

FCF/share = $2.513, stage 1 growth = 0.0% (revenue CAGR -21.4% floored at 0%; the company is valued as if it does not grow rather than extrapolating the decline) for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $9.53, PV of terminal value = $22.96, DCF value = $32.49. Current price $73.85; price is 127.3% above the model value.

Margin of Safety

1/5

Graham value $5.65 (price is 1206.7% above the model value); DCF value $32.49 (price is 127.3% above the model value).

Price-to-Book

1/5

P/B of 6.22; the framework scores above 5.0 as 1.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 2 of 10 years (2017-2026); lowest 2.1%, highest 23.5%.

Gross margin, each year

Between 51.6% and 67.5% over 10 years (a range of 15.9 points).

Competition, in the company’s own words · 10-K filed May 21, 2026

The semiconductor industry is intensely competitive and has historically been characterized by price erosion and rapid technological change. We compete with major domestic and international semiconductor companies, some of which have greater market recognition and greater financial, technical, marketing, distribution and other resources than we have with which to pursue engineering, manufacturing, marketing and

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

5/5

Capital allocation, 2023-2026: dividends or buybacks paid in every year (pass); $5.70B paid out against $7.39B of free cash flow (pass); total debt $6.47B to $5.54B, down 14.5%, 4.7x EBITDA (pass: not up more than 10%); shares outstanding 0.55B to 0.54B, down 0.6% (pass). 4 of 4 tests passed; the framework scores that as 5.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $0.68, g = 0.0%, Y = 4.5
    g floored at 0.0% (3-year EPS CAGR was -74.9%; below -4.25% the formula returns a negative value)
    IV = $5.65
    Current price $73.85 vs Graham value $5.65 — price is 1206.7% above the model value.

  DCF:
    FCF/share = $2.513
    Stage 1 growth = 0.0% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
    Stage 1 g floored at 0.0% (3-year revenue CAGR was -21.4%; the company is valued as if it does not grow rather than extrapolating the decline)
      Y1: $2.513 → PV $2.285
      Y2: $2.513 → PV $2.077
      Y3: $2.513 → PV $1.888
      Y4: $2.513 → PV $1.717
      Y5: $2.513 → PV $1.561
    Stage 1 PV sum = $9.53
    Terminal value at end of Y5 = $36.98
    PV of terminal value = $22.96
    DCF value = $32.49
    Current price $73.85 vs DCF value $32.49 — price is 127.3% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $73.85. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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