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The second-quarter results for Microchip Technology Incorporated (NASDAQ:MCHP) were released last week, making it a good time to revisit its performance. Revenues were US$1.2b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.14 were also better than expected, beating analyst predictions by 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Microchip Technology
Taking into account the latest results, the 23 analysts covering Microchip Technology provided consensus estimates of US$4.56b revenue in 2025, which would reflect a definite 17% decline over the past 12 months. Statutory earnings per share are expected to crater 69% to US$0.45 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.83b and earnings per share (EPS) of US$0.69 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The consensus price target fell 7.1% to US$85.55, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Microchip Technology, with the most bullish analyst valuing it at US$101 and the most bearish at US$70.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Microchip Technology's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 31% by the end of 2025. This indicates a significant reduction from annual growth of 9.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Microchip Technology is expected to lag the wider industry.