Should You Go For This Blue Chip Stock-MCHP

Acrobull Canada Advisory Inc.

January 08			2025
Name	Ticker	Sector/Industry		Market Cap	Risk Factor
Microchip Tech Inc.	MCHP-NASDAQ	Semiconductor		$30.86 Billion	Medium

Microchip Technology, Inc. engages in the provision of semiconductor products. It operates through the Semiconductor Products and Technology Licensing segments. The Semiconductor Products segment is involved in designing, developing, manufacturing, and marketing microcontrollers, development tools and analog, interface, mixed signal, connectivity devices, and timing products.

Recent Highlights

CEO Statement- In the first two weeks of my newly appointed role as Interim CEO and President, I have done a deep dive into the operations of the Company and determined that certain actions are necessary. I want to clarify for investors that I plan to stay in this role, even though the title is interim, for as long as it is necessary, so there is no definitive timeline for my successor." said Steve Sanghi, Microchip's CEO, President and Chair of the Board. Mr. Sanghi continued.

We indicated in our November 5, 2024 earnings call that significant turn’s orders were required to achieve the midpoint of our December 2024 quarter revenue guidance. Those turns orders have been slower than anticipated and we now expect our December 2024 revenue to be close to the low end of our original guidance which is $1.025 billion."

Third Quarter 2024 Financial Highlights

Net sales of $1.164 billion, down 6.2% sequentially and down 48.4% from the year ago quarter. The midpoint of our guidance provided on August 1, 2024 was net sales of $1.150 billion.

Revenue, gross profit and non-GAAP gross profit were positively impacted by a $13.3 million legal settlement. This settlement also positively impacted GAAP and non-GAAP EPS by $0.02 per diluted share.

On a GAAP basis: gross profit of 57.4%; operating income of $146.6 million and 12.6% of net sales; net income of $78.4 million; and EPS of $0.14 per diluted share. Our guidance provided on August 1, 2024 was for GAAP EPS of $0.10 to $0.14 per diluted share.

On a Non-GAAP basis: gross profit of 59.5%; operating income of $340.8 million and 29.3% of net sales; net income of $250.2 million; and EPS of $0.46 per diluted share. Our guidance provided on August 1, 2024 was for Non-GAAP EPS of $0.40 to $0.46 per diluted share.

Returned approximately $261.0 million to stockholders in the September quarter through dividends of $243.7 million and the repurchase of $17.3 million, or 0.2 million shares of our common stock, at an average price of $76.86 per share under our previously announced $4.0 billion stock buyback program.

Stock Observation- The company financial performance has been average and is poised for a turnaround in 2025, its fundamentals stay strong despite headwinds from the world economic conditions. The RSI level for the stock is at 39 which shows oversold conditions. The Customers looking for a blue chip company for long term gains may choose to invest in it.

Risk Involved- Financial performance of the company may have an impact on the company stock performance.

Considering all the factors and financials of the company Acrobull Canada Advisory Inc. maintains Customer Choose Buy for the stock.

Disclaimer- Though our research is fundamentally and technically based on Acrobull Canada Advisory Inc. only provides general advice on the stocks and it is imperative for the investors to do the risk assessment for themselves before investing as Acrobull Canada Advisory Inc. would not be liable for any loss or profit arising out through the investment made by the investors on our recommendations.

It is also advisable for the investors to consult with Financial Advisor, Broker or to seek any legal assistance as the research conducted by Acrobull Canada Advisory Inc. is factually based and recommendations are given in accordance with that, but it is imperative to understand that Acrobull Canada Advisory Inc. does not guarantee returns.

Acrobull Recommendation Based on Evaluation

Current Market Price	$57.47 USD
Acrobull Recommendation	Buy
Target Price	Target $63.25 USD
RSI Level	14 Day RSI 39
Total Shares Outstanding	5.37 Million
Shares held by Insiders Risk Factor Stop Loss	2.17% Medium 5%