MCHPNEUTRAL

Return on Equity (ROE)

3.4%

Updated 104h ago

Sector Performance

18th percentile

MCHP

3.4%

Sector Median

13.8%

Sector Avg

31.4%

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Deep Analysis

Return on Equity (ROE) measures how efficiently a company generates profit from its shareholders' money — a higher percentage means better use of invested capital.

MCHP's current ROE of 3.4% is far below the sector median of 13.8%, placing it in the 18th percentile among peers. The year-over-year change is not available, but ROE improved 9.7% quarter-over-quarter, rising from 3.1% to 3.4%. The combination of a very low absolute ROE and a single positive quarterly uptick suggests limited near-term risk of further deterioration, but no strong evidence of a sustained turnaround. This weak level relative to peers undermines the stock’s overall NEUTRAL verdict, as the metric points to below-average profitability. However, the quarterly improvement tempers that contradiction, aligning with a neutral stance rather than a bearish one.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about MCHP?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

Who are MCHP's closest peers by Return on Equity (ROE)?

The closest peers by Return on Equity (ROE) include: MRNA (-36.6%), FICO (-37.3%), XRAY (-37.7%), VRSN (-38.3%), MSCI (-45.3%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.