Microchip Unveils New Development Board For Designing

Microchip Technology Inc. (NASDAQ:MCHP) recently launched the Explorer 16/32 Development Board, which has been developed for carrying out designing tasks with 16-bit as well as 32-bit microcontrollers.

Compared to the company’s leading Explorer 16 Development Board, the new motherboard costs less and features an in-built programmer/debugger along with new features that are in sync with the latest embedded systems design requirements.

Key Features

mikroBUS Interface: The new development board has a mikroBUS interface that makes the addition of new functionalities a seamless task.

Integrated USB: The new motherboard features an integrated USB for the purpose of powering the unit as well as communication. This eliminates the requirement of additional communication accessories and external power adapters.

Backwards Compatible: Notably, the new board is backwards compatible with the previous Explorer 16 Board meaning that customers will be able to use the existing libraries, codes, prototypes, PICtail Plus cards and PIMs interfaced with one another with the help of a side PICtail Plus connector.

Our Take

We believe the new motherboard is an important addition to Microchip’s product portfolio, which will drive its top-line growth in the long run. The company is one of the fastest-growing providers of 16-bit and 32-bit microcontrollers in the world. The microcontroller business of the company continued to outperform the industry and enabled it to gain significant market share.

Moreover, the company is increasingly expanding its touch business beyond handsets and tablets into areas such as automotive industrial applications. This is further expected to drive top-line growth through fiscal 2017.

Meanwhile, Microchip recently revised its sales and earnings guidance for the second quarter of fiscal 2017. The company now forecasts non-GAAP net sales to increase in the range of 1% to 3% compared with the earlier guidance range of flat to up 4% up.

However, the mid-point of the guidance remains unchanged at 2%. Further, non-GAAP earnings are now expected to be in the range of 85 to 89 cents per share compared with the previous guidance range of 83 to 91 cents per share.

The revised guidance reflects the impact of the recent acquisitions of Atmel and Micrel. The company stated that integration of both the businesses is almost complete.

Moreover, Microchip now anticipates operating expenses of the Atmel business, as a percentage of sales, to decline to 30% compared with 40% at the time of the acquisition. This will definitely help the company to report improved profitability in the second quarter.

Zacks Rank & Key Picks

At present, Microchip carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are Lantronix, Inc. (NASDAQ:LTRX) sporting a Zacks Rank #1 (Strong Buy) and NCR Corporation (NYSE:NCR) and VASCO Data Security International Inc. (NASDAQ:VDSI) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>