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Monolithic Power Systems Inc MPWR

Morningstar Rating
$730.05 +1.95 (0.27%)
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Company Report

Monolithic Power Earnings: We Raise Our Valuation on a Higher Data Center and AI Forecast

We raise our fair value estimate for wide-moat Monolithic Power Systems to $600 per share, from $540, behind a higher forecast for the firm's sales into data centers and artificial intelligence applications. MPS’ first-quarter results beat our expectations and second-quarter guidance met our above-consensus model. MPS’ strong data center sales are offsetting weakness in its other end markets and we expect this dynamic to continue through 2024. We like MPS’ position as a disruptor in power chips, which drives share gains and enables the firm to win significant business alongside AI accelerators. We still see shares as modestly overvalued, however.

Price vs Fair Value

MPWR is trading at a 142% premium.
Price
$730.05
Fair Value
$399.00
Uncertainty
High
1-Star Price
$754.00
5-Star Price
$273.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Monolithic Power’s BCD process has the fewest layers and smallest die size among competing analog offerings, providing the best power density and energy efficiency to customers.

Bears

Monolithic Power holds a small share of the power management chip market and will be challenged to steal market share from large, moat-endowed, well-established competitors.

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News

Trading Information

Previous Close Price
$728.10
Day Range
$721.83738.81
52-Week Range
$392.10778.15
Bid/Ask
$695.50 / $748.75
Market Cap
$35.53 Bil
Volume/Avg
258,860 / 523,671

Key Statistics

Price/Earnings (Normalized)
62.99
Price/Sales
19.51
Dividend Yield (Trailing)
0.58%
Dividend Yield (Forward)
0.68%
Total Yield
0.59%

Company Profile

Monolithic Power Systems is an analog and mixed-signal chipmaker, specializing in power management solutions. The firm’s mission is to reduce total energy consumption in end systems, and it serves the computing, automotive, industrial, communications, and consumer end markets. MPS uses a fabless manufacturing model, partnering with third-party chip foundries to host its proprietary BCD process technology.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Mid Growth
Total Number of Employees
3,564

Competitors

Valuation

Metric
MPWR
STM
TXN
Price/Earnings (Normalized)
62.9910.1731.00
Price/Book Value
16.812.2010.45
Price/Sales
19.512.3810.64
Price/Cash Flow
60.157.2626.22
Price/Earnings
MPWR
STM
TXN

Financial Strength

Metric
MPWR
STM
TXN
Quick Ratio
4.752.503.68
Current Ratio
6.343.344.91
Interest Coverage
59.7317.87
Quick Ratio
MPWR
STM
TXN

Profitability

Metric
MPWR
STM
TXN
Return on Assets (Normalized)
24.01%17.48%22.56%
Return on Equity (Normalized)
29.11%25.95%43.06%
Return on Invested Capital (Normalized)
27.96%20.70%27.08%
Return on Assets
MPWR
STM
TXN
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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NVDA
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TSM
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TXN
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MU
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ADI
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