Microchip TechnologyWBO:MCHP -1.40%68 Operating Margin % is 17.07% as of Mar. 2026, which is 6% above its 10-year median of 16.18. GuruFocus rates WBO:MCHP with a GF Score™ of 68/100 and a GF Value™ of €51.75 (Significantly Overvalued). The stock has 10 warning signs investors should review. Among 1,023 Semiconductors companies, Microchip Technology ranks better than 65.59% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Microchip Technology Operating Margin % Related Terms
Microchip Technology Operating Margin % Historical Data
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The historical data trend for Microchip Technology's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
WBO:MCHP vs CBRS, ON, GFS: Operating Margin % Comparison
For the Semiconductors subindustry, Microchip Technology's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Microchip Technology Operating Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Microchip Technology's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Microchip Technology's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Microchip Technology's Operating Margin % for the fiscal year that ended in Mar. 2026 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Microchip Technology (WBO:MCHP) has a Operating Margin % of 17.07% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Microchip Technology and its competitors. This is near median its historical median of 16.18. Over the past decade, Microchip Technology's Operating Margin % has ranged from 8.53 to 36.88. According to the industry distribution chart, Microchip Technology ranks #352 out of 1023 companies in the Semiconductors industry, placing it in the top 34.4%.
Is Microchip Technology's Operating Margin % too high?
Microchip Technology's current Operating Margin % of 17.07% is near median its 10-year median of 16.18. Over the past 10 years, this metric has ranged from a low of 8.53 to a high of 36.88. The Semiconductors industry median Operating Margin % is 5.24. Microchip Technology's value of 17.07% is 225.8% above this industry median. Based on the distribution chart, Microchip Technology ranks #352 out of 1023 companies in the Semiconductors industry, which is above the industry midpoint. Overall, Microchip Technology has a GF Score™ of 68/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Microchip Technology's Operating Margin % compare to CBRS and ON?
According to the Semiconductors industry distribution chart, Microchip Technology ranks #352 out of 1023 companies for Operating Margin %. This puts Microchip Technology in the upper half of its industry. The industry median Operating Margin % is 5.24. Microchip Technology's value of 17.07% is 225.8% above this benchmark. Historically, Microchip Technology's own Operating Margin % has ranged from 8.53 to 36.88 over the past decade. While the company's 10-year median is 16.18 vs. the industry median of 5.24, Microchip Technology has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Semiconductors company?
The median Operating Margin % among Semiconductors companies is 5.24, based on 1,023 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microchip Technology's current Operating Margin % of 17.07% is 225.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Microchip Technology and its competitors. For the Semiconductors industry, the median Operating Margin % is 5.24 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microchip Technology's current Operating Margin % is 17.07%, which is near median its own 10-year median of 16.18. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Microchip Technology stock overvalued right now?
Based on GuruFocus' analysis, Microchip Technology (WBO:MCHP) is currently considered Significantly Overvalued. The stock's GF Value™ is €51.75, compared to a current price of €81.79 — trading 58% above its estimated fair value. The current Operating Margin % is 17.07%, which is near median its 10-year median of 16.18 and 225.8% above the Semiconductors industry median of 5.24. Microchip Technology's overall GF Score™ is 68/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Microchip Technology (WBO:MCHP), the current Operating Margin % is 17.07% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Microchip Technology (WBO:MCHP) Overvalued in 2026?
Based on GuruFocus' analysis, Microchip Technology stock appears to be overvalued.
The current stock price of €81.79 is trading 58% above its estimated GF Value™ of €51.75.
GuruFocus considers Microchip Technology to be Significantly Overvalued.
Key valuation signals for WBO:MCHP:
Operating Margin %: 17.07% (near median its 10-year median of 16.18)
GF Value™: €51.75 vs. price of €81.79 (58% above fair value)
Industry Position: 225.8% above the Semiconductors median (#352 of 1023)
No single metric tells the full story. See the WBO:MCHP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Microchip Technology became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.
68GF Score
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