Microchip Technology (MCHP) shares soared 3.1% in the last trading session to close at $150.06. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.1% loss over the past four weeks.
The increase in share price can be attributed to the continued strength witnessed in Microchip’s analog and microcontroller businesses. The company is one of the leading providers of 8-bit, 16-bit and 32-bit microcontrollers.
Microchip’s robust and innovative product pipeline is also anticipated to drive the company’s top line growth. The company recently added nine new units to its SA50-120 power converter portfolio. The new units are based on the Commercial Off-the-Shelf (COTS) technology that aids engineers with space-qualified power converters to slash development costs and lower risks.
The company is increasingly expanding its touch business beyond handsets and tablets in areas, such as automotive industrial applications. Strategic acquisitions like Microsemi and Atmel along with strong semiconductor industry growth prospects augur well for Microchip in the longer haul.
Price and Consensus
This chipmaker is expected to post quarterly earnings of $1.73 per share in its upcoming report, which represents a year-over-year change of +18.5%. Revenues are expected to be $1.45 billion, up 9.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Microchip Tech, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MCHP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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Microchip Technology Incorporated (NASDAQ:MCHP): Free Stock Analysis Report
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