Stock fact sheet · data as of
Microchip Technology Incorporated (MCHP): fair value, margin of safety and Wheel Score
Technology · Semiconductors · United States · Blend
Is MCHP undervalued?
Microchip Technology Incorporated (MCHP) closed at 74.26 on 16 Oct 2026, 228% above the GLS average fair value of 22.65. 9 of the 9 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.
The 9 models disagree widely: GLS Growth gives 2.43 while 10 Cap gives 45.42. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files MCHP under Blend.
Nine valuation models for MCHP
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 10.25 | -86% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 14.91 | -80% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 39.13 | -47% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 16.48 | -78% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 2.43 | -97% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 45.42 | -39% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 39.25 | -47% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 26.78 | -64% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 9.23 | -88% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -10.23 | -114% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 110.50 | +49% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health MCHP scores 7/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is low at 1.4 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC 1.7%, ROE 3.1%, ROA 1.4% - with debt at 0.86 times equity and a free-cash-flow yield of 2.8%.
The dividend yield is 2.45% at a payout ratio of 243%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Semiconductor Products 97%, Technology Licensing 3% (quarter Q1 FY2027).
Institutional ownership scores 10/10, insider activity 9/10 and Congressional trading 6/10 on the GLS smart-money scales; the last recorded Congressional buy was on 10 Aug 2026.
| Piotroski F-score | 7 / 9 | ROIC | 1.7% |
|---|---|---|---|
| GLS Moat | 1.4 / 10 | ROE | 3.1% |
| Debt / equity | 0.86 | ROA | 1.4% |
| Free-cash-flow yield | 2.8% | Payout ratio | 243% |
| Institutions | 10 / 10 | Insiders · Congress | 9 · 6 / 10 |
Wheel Score 55: Fair
MCHP scores 55 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 0/25, Health 16/20, Moat 2/15, Premium 20/20, Stability 18/20. Value (0/25) is where the points are missing.
Implied volatility is 61% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (20 of 20) because volatility this high usually comes with a reason. The option chain is deep: 421,920 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 14.6M shares a day on a market cap of $40.3B, with a beta of 1.76 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 18 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -228% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 2 / 15 | moat 1.4/10 | |
| Premium | 20 / 20 | implied volatility 61% | |
| Stability | 18 / 20 | 14.6M shares/day, $40.3B cap, beta 1.76 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 5 Nov 2026 (after the close), 20 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Semiconductors
The 12 companies below are the closest to Microchip Technology Incorporated by market cap within the Semiconductors industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| STM STMicroelectronics N.V. | 46.90 | 13.03 | -260% | 58Fair | $41.9B |
| CRDO Credo Technology Group Holding Ltd | 178.50 | 83.67 | -113% | 45Weak | $33.5B |
| CBRS Cerebras Systems Inc. | 142.17 | - | - | 45Weak | $32.2B |
| ALAB Astera Labs, Inc. Common Stock | 301.98 | 64.71 | -367% | 46Weak | $52.4B |
| UMC United Microelectronics Corporation | 21.40 | 108.87 | +80% | 84Prime | $53.4B |
| TER Teradyne, Inc. | 359.44 | 121.24 | -196% | 58Fair | $56.2B |
| ON ON Semiconductor Corporation | 73.70 | 45.63 | -62% | 56Fair | $28.7B |
| NXPI NXP Semiconductors N.V. | 231.09 | 146.50 | -58% | 62Fair | $58.3B |
| GFS GLOBALFOUNDRIES Inc. | 48.76 | 26.92 | -81% | 59Fair | $26.8B |
| TEL TE Connectivity plc | 210.33 | 177.44 | -19% | 71Good | $61.0B |
| MPWR Monolithic Power Systems, Inc. | 1,249.20 | 395.03 | -216% | 61Fair | $61.4B |
| Q Qnity Electronics, Inc. | 121.62 | 46.23 | -163% | 64Fair | $25.4B |
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Start free See the Sunday ScanQuestions about MCHP
Is MCHP undervalued right now?
No: at 74.26 the stock trades 228% above the GLS average fair value of 22.65 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of MCHP and what does it mean?
MCHP scores 55 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for MCHP?
22.65 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Microchip Technology Incorporated report earnings next?
The next earnings report is due on 5 Nov 2026 (after the close), 20 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does MCHP have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 421,920 open interest across all expiries and implied volatility of 61% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.