Microchip Technology Incorporated Depositary Shares Each Representing a 1/20th Interest in a Share of 7.50% Series A Mandatory Convertible Preferred Stock (MCHPP)

FairStock Score: 56/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for durable advantages and a margin of safety. Microchip develops embedded control solutions and microcontrollers for markets including automotive, industrial, and computing. The recovery is real in the filed figures: in fiscal Q1 2027, the quarter ended 2026-06-30, revenue was $1.5B, net income was $229.8M, and diluted EPS was $0.37, compared with a net loss of $18.6M and diluted EPS of $-0.09 in fiscal Q1 2026, the quarter ended 2025-06-30. But context matters. In FY2026, the year ended 2026-03-31, revenue was $4.7B, net income was $230.0M, and diluted EPS was $0.22. In FY2025, the year ended 2025-03-31, the company had a net loss of $500,000 and diluted EPS of $-0.01. In FY2024, the year ended 2024-03-31, net income was $1.9B on revenue of $7.6B and diluted EPS of $3.48. So this is a turnaround, as FairStock classifies it, not yet a return to peak profitability. Financial health is decent: FairStock's Piotroski F-Score is 7/9, Altman Z-Score is 3.37, and D/E is 0.84. But returns are modest: FairStock's ROE is 7.19% and ROCE is 3.54%; trailing free cash flow was $1.1B, a 3.2% FCF yield. At the 2026-10-13 close of $63.77, FairStock's P/B is 5.37 and EV/EBITDA is 27.23. For a 7.50% preferred with a 5.88% yield, income is appealing if durable, but the mandatory conversion and 1.76 beta add uncertainty. I see no bargain; I need proof the recovery can persist.

In plain English: Microchip makes small computer chips used in cars, factories, and many electronic devices, and these depositary shares pay a fixed 7.50% dividend. The business is recovering: the latest quarter was profitable after a loss, but full-year profit is still far below its earlier peak. At the current price, the shares look fully priced and not cheap compared with current profits and cash flow.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2027 10-Q (period ended 2026-06-30) · fiscal Q3 2026 10-Q (period ended 2025-12-31) · fiscal Q2 2026 10-Q (period ended 2025-09-30) · fiscal Q1 2026 10-Q (period ended 2025-06-30) · FY2026 10-K (period ended 2026-03-31) · FY2025 10-K (period ended 2025-03-31) · FY2024 10-K (period ended 2024-03-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer