Microchip Technology Incorporated (MCHP) DCF Valuation
Transparent DCF models put Microchip Technology Incorporated (MCHP)'s fair value in a range of $9.40 – $46.18 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $87.83 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $87.83, the market is pricing in roughly +12.6%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -13.7%. The price is betting on acceleration above its track record.
Current Price
$87.83
Fair-Value Range
$9.40 – $46.18
Market-Implied Growth
+12.6%/yr
vs -13.7% 5Y actual
MCHP DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $1.8B · 0.54B shares · net debt $5.3B
Estimated Fair Value
$46.18
-47.4% vs $87.83
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $87.83; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $59.74 | $63.30 | $67.51 | $72.56 | $78.73 |
| 9.0% | $49.95 | $52.38 | $55.19 | $58.47 | $62.34 |
| 10.0% | $42.48 | $44.21 | $46.18 | $48.42 | $51.01 |
| 11.0% | $36.62 | $37.89 | $39.31 | $40.90 | $42.71 |
| 12.0% | $31.89 | $32.84 | $33.90 | $35.07 | $36.38 |
About Microchip Technology Incorporated
Microchip Technology Incorporated creates, produces, and sells intelligent, interconnected, and secure embedded control solutions to customers throughout the Americas, Europe, and Asia. The company's core offerings include a range of microcontrollers, such as general-purpose 8-bit, 16-bit, and 32-bit models, as well as 32-bit embedded microprocessors. These specialized microcontrollers are designed for numerous applications across industries like automotive, industrial, computing, communications, lighting, power supplies, motor control, human-machine interfaces, security, and various wired and wireless connectivity needs. Beyond its processors, Microchip provides development tools that enable system designers to program its microcontroller and microprocessor units for specific tasks. Its product lineup also features Field-Programmable Gate Arrays (FPGAs) and a broad selection of analog, interface, mixed-signal, and timing components. This extensive category encompasses power management, linear, high-voltage, thermal management, discrete diodes and MOSFETs, radio frequency (RF), drivers, safety, security, USB, Ethernet, wireless, and other interface products. For compact device applications, the company supplies memory products such as serial EEPROM, serial and parallel flash, serial SRAM, and serial EERAM. A significant aspect of Microchip's business involves licensing its SuperFlash embedded flash and NVM technologies. These are provided to foundries, integrated device manufacturers, and design partners for use in manufacturing their own microcontrollers, gate arrays, RF, analog, and neuromorphic computing products that require integrated non-volatile memory. Moreover, Microchip delivers engineering services, along with wafer foundry, assembly, and test subcontracting manufacturing services. It also produces specialized timing systems, application-specific integrated circuits (ASICs), and aerospace products. Microchip Technology Incorporated was established in 1989 and is headquartered in Chandler, Arizona.
- Sector
- Technology
- Industry
- Semiconductors
- CEO
- Stephen Sanghi