Monolithic Power Systems (NasdaqGS:MPWR) - Share price, News & Analysis

Q: What is the Fair Price of MPWR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MPWR ($532.01) is trading above our estimate of [[fair value]] ($476)

MPWR fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	6/6
Financial Health	6/6
Dividends	0/6

MPWR Stock Overview

Rewards

Earnings are forecast to grow 14.97% per year

Earnings grew by 68.7% over the past year

Risk Analysis

Significant insider selling over the past 3 months

Monolithic Power Systems Competitors

Skyworks Solutions

NasdaqGS:SWKS

US$17.8b

ON Semiconductor

NasdaqGS:ON

US$28.7b

Microchip Technology

NasdaqGS:MCHP

US$39.1b

NXP Semiconductors

NasdaqGS:NXPI

US$47.3b

Price History & Performance

Summary of all time highs, changes and price drops for Monolithic Power Systems
Historical stock prices
Current Share Price	US$532.01
52 Week High	US$580.00
52 Week Low	US$348.02
Beta	1.11
1 Month Change	36.54%
3 Month Change	36.97%
1 Year Change	15.85%
3 Year Change	269.48%
5 Year Change	424.30%
Change since IPO	5,306.61%

Recent News & Updates

Aug 07

With EPS Growth And More, Monolithic Power Systems (NASDAQ:MPWR) Makes An Interesting Case

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Shareholder Returns

	MPWR	US Semiconductor	US Market
7D	1.1%	-1.9%	1.2%
1Y	15.8%	-8.1%	-11.6%

Return vs Industry: MPWR exceeded the US Semiconductor industry which returned -12.2% over the past year.

Return vs Market: MPWR exceeded the US Market which returned -13.5% over the past year.

Price Volatility

Is MPWR's price volatile compared to industry and market?
MPWR volatility
MPWR Average Weekly Movement	9.1%
Semiconductor Industry Average Movement	8.8%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.2%

Stable Share Price: MPWR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: MPWR's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1997	2,773	Michael Hsing	https://www.monolithicpower.com

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the computing and storage, automotive, industrial, communications, and consumer markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as portable electronic devices, wireless LAN access points, computers and notebooks, monitors, infotainment applications, and medical equipment. It also offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in notebook computers, monitors, car navigation systems, and televisions, as well as for general illumination products.

Monolithic Power Systems Fundamentals Summary

How do Monolithic Power Systems's earnings and revenue compare to its market cap?
MPWR fundamental statistics
Market Cap	US$24.81b
Earnings (TTM)	US$335.69m
Revenue (TTM)	US$1.50b

73.9x

P/E Ratio

16.6x

P/S Ratio

Is MPWR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MPWR income statement (TTM)
Revenue	US$1.50b
Cost of Revenue	US$628.72m
Gross Profit	US$870.03m
Other Expenses	US$534.34m
Earnings	US$335.69m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	7.20
Gross Margin	58.05%
Net Profit Margin	22.40%
Debt/Equity Ratio	0%

How did MPWR perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

37%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MPWR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MPWR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MPWR. This is calculated by dividing MPWR's market cap by their current preferred multiple.
What is MPWR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$24.81b

MPWR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	16x
Enterprise Value/EBITDA	55.3x
PEG Ratio	4.9x

Price to Earnings Ratio vs Peers

How does MPWR's PE Ratio compare to its peers?

MPWR PE Ratio vs Peers

The above table shows the PE ratio for MPWR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	18.8x
SWKS Skyworks Solutions	13.7x	11.6%	US$17.8b
ON ON Semiconductor	16.7x	1.0%	US$28.7b
MCHP Microchip Technology	25.4x	6.9%	US$39.1b
NXPI NXP Semiconductors	19.3x	7.4%	US$47.3b
MPWR Monolithic Power Systems	73.9x	15.0%	US$24.8b

Price-To-Earnings vs Peers: MPWR is expensive based on its Price-To-Earnings Ratio (73.9x) compared to the peer average (18.8x).

Price to Earnings Ratio vs Industry

How does MPWR's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: MPWR is expensive based on its Price-To-Earnings Ratio (73.9x) compared to the US Semiconductor industry average (19.7x)

Price to Earnings Ratio vs Fair Ratio

What is MPWR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MPWR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	73.9x
Fair PE Ratio	28.4x

Price-To-Earnings vs Fair Ratio: MPWR is expensive based on its Price-To-Earnings Ratio (73.9x) compared to the estimated Fair Price-To-Earnings Ratio (28.4x).

Share Price vs Fair Value

What is the Fair Price of MPWR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MPWR ($532.01) is trading above our estimate of fair value ($476)

Significantly Below Fair Value: MPWR is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Monolithic Power Systems forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MPWR's forecast earnings growth (15% per year) is above the savings rate (1.9%).

Earnings vs Market: MPWR's earnings (15% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: MPWR's earnings are forecast to grow, but not significantly.

Revenue vs Market: MPWR's revenue (14% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: MPWR's revenue (14% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MPWR's Return on Equity is forecast to be high in 3 years time (28%)

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Past Performance

How has Monolithic Power Systems performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

31.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MPWR has high quality earnings.

Growing Profit Margin: MPWR's current net profit margins (22.4%) are higher than last year (19.1%).

Past Earnings Growth Analysis

Earnings Trend: MPWR's earnings have grown significantly by 31.3% per year over the past 5 years.

Accelerating Growth: MPWR's earnings growth over the past year (68.7%) exceeds its 5-year average (31.3% per year).

Earnings vs Industry: MPWR earnings growth over the past year (68.7%) exceeded the Semiconductor industry 52.7%.

Return on Equity

High ROE: MPWR's Return on Equity (23.6%) is considered high.

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Financial Health

How is Monolithic Power Systems's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MPWR's short term assets ($1.3B) exceed its short term liabilities ($254.5M).

Long Term Liabilities: MPWR's short term assets ($1.3B) exceed its long term liabilities ($108.1M).

Debt to Equity History and Analysis

Debt Level: MPWR is debt free.

Reducing Debt: MPWR has not had any debt for past 5 years.

Debt Coverage: MPWR has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: MPWR has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Monolithic Power Systems's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.56%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MPWR's dividend (0.56%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.51%).

High Dividend: MPWR's dividend (0.56%) is low compared to the top 25% of dividend payers in the US market (4.09%).

Stability and Growth of Payments

Stable Dividend: MPWR is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: MPWR is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: MPWR is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: MPWR is not paying a notable dividend for the US market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

15.1yrs

Average management tenure

CEO

Michael Hsing (62 yo)

25yrs

Tenure

US$20,254,831

Compensation

Mr. Michael R. Hsing has been President, Chief Executive Officer and Director at Monolithic Power Systems, Inc since August 1997. He is Founder of Monolithic Power Systems, Inc. He held senior technical po...

CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD20.25M) is above average for companies of similar size in the US market ($USD13.03M).

Compensation vs Earnings: Michael's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: MPWR's management team is seasoned and experienced (15.1 years average tenure).

Board Members

Experienced Board: MPWR's board of directors are seasoned and experienced ( 15.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MPWR insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/10 00:00
End of Day Share Price	2022/08/10 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31