Price to FCFE (P/FCFE)
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
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Free Cash Flow to Equity (FCFE)
Microchip Technology Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
- Net cash provided by operating activities
- The net cash generated from operating activities demonstrates an overall increasing trend from 2017 through 2022. Starting at approximately $1.05 billion in 2017, the figure steadily rose to about $1.42 billion in 2018 and reached $1.67 billion in 2019. There was a slight decline in 2020 down to $1.54 billion, potentially indicating some operational challenges or external factors impacting cash generation. However, the figure rebounded noticeably to $1.92 billion in 2021 and surged significantly in 2022 to approximately $2.84 billion, reflecting strong operational cash flow performance in the most recent year reported.
- Free cash flow to equity (FCFE)
- The free cash flow to equity displays considerable volatility over the six-year period. In 2017, FCFE was reported at nearly $1.94 billion, followed by a decline to $1.14 billion in 2018. A remarkable spike occurred in 2019, with FCFE jumping to approximately $6.56 billion, the highest point in the series, suggesting an exceptional inflow or reduced capital expenditures that year. This peak was not sustained, as FCFE sharply decreased to $406 million in 2020 and remained relatively low at $409 million in 2021. The year 2022 saw a recovery to about $1.10 billion, indicating a partial restoration of free cash flow available to equity holders but still below the peak in 2019.
- Overall trends and insights
- Operating cash flows have exhibited general growth with a minor interruption in 2020 but rebounded strongly by 2022. In contrast, FCFE showed high fluctuation, with a significant peak in 2019 followed by a steep decline and modest recovery. The disparity between sustained growth in operating cash and the volatility in FCFE may point to fluctuations in investment activities, financing decisions, or changes in working capital. The substantial FCFE peak in 2019 could reflect a one-time event or variation in capital expenditures, which warrants further investigation for conclusive insights. The recovery of FCFE in 2022, alongside increased operating cash flow, suggests improving financial flexibility and potential capacity for shareholder returns or reinvestment.
Price to FCFE Ratio, Current
Microchip Technology Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Advanced Micro Devices Inc. | |
| Analog Devices Inc. | |
| Applied Materials Inc. | |
| Broadcom Inc. | |
| Intel Corp. | |
| KLA Corp. | |
| Lam Research Corp. | |
| Micron Technology Inc. | |
| NVIDIA Corp. | |
| Qualcomm Inc. | |
| Texas Instruments Inc. | |
| P/FCFE, Sector | |
| Semiconductors & Semiconductor Equipment | |
| P/FCFE, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2022-03-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Microchip Technology Inc., historical P/FCFE calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in thousands)2 | |||||||
| FCFE per share3 | |||||||
| Share price1, 4 | |||||||
| Valuation Ratio | |||||||
| P/FCFE5 | |||||||
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Advanced Micro Devices Inc. | |||||||
| Analog Devices Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Inc. | |||||||
| Intel Corp. | |||||||
| KLA Corp. | |||||||
| Lam Research Corp. | |||||||
| Micron Technology Inc. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
| P/FCFE, Sector | |||||||
| Semiconductors & Semiconductor Equipment | |||||||
| P/FCFE, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Microchip Technology Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
- Share Price
- The share price exhibited a generally upward trend over the analyzed period, starting at $41.26 in 2017 and reaching a peak of $71.22 in 2021. Despite this peak, there was a minor decline to $66.67 in 2022, indicating some recent depreciation after the highest valuation.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share demonstrated significant volatility. It decreased from $4.23 in 2017 to $2.42 in 2018, then sharply increased to $13.78 in 2019. Subsequent years saw a drastic reduction to $0.83 in 2020 and $0.75 in 2021, with a modest recovery to $1.98 in 2022. This variability indicates fluctuating free cash flows available to equity shareholders across the years.
- Price to FCFE Ratio (P/FCFE)
- The P/FCFE ratio reflected high instability correlating with the fluctuations in FCFE per share and share price movements. The ratio rose from 9.76 in 2017 to a high of 95.19 in 2021, driven primarily by decreasing FCFE per share coupled with increasing share prices. In 2019, the ratio dipped sharply to 2.95 due to the spike in FCFE per share. The ratio decreased again to 33.71 in 2022, suggesting partial normalization after extreme valuation multiples in previous years.
- Overall Insights
- The combined analysis shows that while the share price generally increased over the six years, underlying free cash flows to equity experienced considerable fluctuations. The elevated P/FCFE ratios from 2020 onwards highlight potential overvaluation periods relative to cash flows, whereas the sharp decline in FCFE per share during these years signals challenges in generating consistent free cash flow. The data suggest caution in interpreting stock valuation solely on price trends without considering underlying cash flow stability.