Monolithic Power Systems, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Monolithic Power Systems, Inc. (NASDAQ:MPWR) just released its latest quarterly results and things are looking bullish. Monolithic Power Systems beat earnings, with revenues hitting US$458m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Monolithic Power Systems

Following the latest results, Monolithic Power Systems' 13 analysts are now forecasting revenues of US$2.06b in 2024. This would be a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 14% to US$9.60. In the lead-up to this report, the analysts had been modelling revenues of US$2.04b and earnings per share (EPS) of US$9.13 in 2024. So the consensus seems to have become somewhat more optimistic on Monolithic Power Systems' earnings potential following these results.

The consensus price target was unchanged at US$762, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Monolithic Power Systems, with the most bullish analyst valuing it at US$850 and the most bearish at US$600 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Monolithic Power Systems shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Monolithic Power Systems' revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2024 being well below the historical 26% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. Factoring in the forecast slowdown in growth, it looks like Monolithic Power Systems is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Monolithic Power Systems following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Monolithic Power Systems going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Monolithic Power Systems you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.