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POWI

Power Integrations NasdaqGS:POWI Stock Report

Last Price

US$82.21

Market Cap

US$4.7b

7D

-0.2%

1Y

-16.5%

Updated

13 Aug, 2022

Data

Company Financials +
POWI fundamental analysis
Snowflake Score
Valuation0/6
Future Growth1/6
Past Performance5/6
Financial Health6/6
Dividends4/6

POWI Stock Overview

Power Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide.

Power Integrations Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Power Integrations
Historical stock prices
Current Share PriceUS$82.21
52 Week HighUS$110.66
52 Week LowUS$67.26
Beta1.06
1 Month Change11.26%
3 Month Change-2.28%
1 Year Change-16.54%
3 Year Change89.18%
5 Year Change139.33%
Change since IPO3,947.26%

Recent News & Updates

Aug 11

Power Integrations: Q2 Results Confirm Our Bullish Thesis

Despite softness in some of its markets, POWI managed to deliver strong results for the second quarter 2022. The valuation is getting more attractive as earnings per share continue to grow. We view shares currently as slightly undervalued, and POWI as one of the best chip makers to own, given the tailwinds it has from increasing demand for energy efficient solutions. Despite softness in some of its markets, Power Integrations (POWI) managed to deliver strong results for the quarter. Second quarter revenues were up 2% y/y to $184 million, which was slightly below its previous guidance range. Where the company really impressed was with its non-GAAP earnings per share, which grew 24% y/y to $1.03 driven by a significant expansion in gross margin. The company had been warning since the previous quarter that there were emerging concerns regarding the near-term demand environment, particularly in the mobile segment. The weakness in the smartphone market has been confirmed and had a significant impact in Q2 results. Revenues from the company's communications category were 30% lower sequentially and driven entirely by Chinese handset customers. Revenues from other smartphone OEMs were up slightly from the prior quarter. Softness in the computer category was also significant, but was cushioned by recent market share gains in notebooks, resulting in a modest decrease of ~5%. Industrial revenues were the star segment in the quarter, increasing ~20% sequentially. While softness in several of the company's markets can be a source of worry, the good news about the company is that it has a history of gaining significant market share during downturns. They tend to see it as an opportunity to go after more design wins and come out of the downturn stronger. The other thing is that even if some cyclical headwinds are starting to appear, the company continues to have very strong secular tailwinds that should help it continue to grow over the long-term. It also has a strong competitive advantage with its GaN technology, which has many benefits when it comes to efficiency, and low-power consumption, and this is becoming increasingly important in a large number of applications. The slide below shows just some of the main applications. Power Integrations Investor Presentation Q2 2022 Results Revenues increased two percent year over year to $184 million. GAAP earnings were $0.96 per diluted share, while non-GAAP earnings per diluted share grew 24 percent y/y to $1.03. Manufacturing efficiencies have been helping them a lot. Power Integrations believes that some of the gains in operating margins, in large part thanks to operating leverage, are sustainable and has updated its target model for non-GAAP operating margins to a range of 25%-30%. Revenues from the communication category fell nearly 50% compared to H1 last year, reflecting the recent weakness in smartphones but also the unusually strong demand in the first half of 2021. Computer revenues were up 15% y/y driven mainly by notebooks. Consumer revenues were up mid-20s driven by appliances, while industrial revenues increased nearly 40% y/y. Revenue mix for the second quarter was 38% consumer, 35% industrial, 18% communication and 9% computer. Financials During the quarter, the higher-margin industrial and consumer categories accounted for 9 percentage points more than in the prior quarter, driving non-GAAP gross margin up to 58.5%. The company expects gross margin to remain above the high end of their target range for the next several quarters, thanks to favorable mix and manufacturing efficiencies, and the strength of the dollar versus the yen. POWI Gross Profit Margin (Quarterly) data by YCharts Power Integrations repurchased 1.9 million shares during the June quarter for $158 million, exhausting the company's repurchase authorization. Balance Sheet Cash and investments on the balance sheet fell by $116 million during the quarter to $328 million. Despite this reduction, the company continues to have a significant net cash position, with basically no long-term debt. We view the balance sheet as still extremely solid, and it continues to provide optionality for the company should it decide to make more aggressive investments or pursue M&A. POWI Cash and Short Term Investments (Quarterly) data by YCharts Guidance The company expects revenues for the September quarter to be $165 million, plus or minus 5%, and non-GAAP gross margin for Q3 to go down slightly to about 58%, reflecting the seasonal slowdown in air conditioning, which will result in a slightly less favorable mix. Valuation Thanks to the strong results the company has delivered the valuation is getting a lot more attractive. On an EV/EBITDA basis shares had not been this cheap since the market crash of late 2018. Both the EV/EBITDA and the forward version are both considerably below the five year average for the company. POWI EV to EBITDA data by YCharts The company seems to agree that shares are currently trading at an attractive valuation given that they have been buying back shares in a significant manner. While the dividend yield remains low, the net common payout yield, which incorporates net buybacks, is currently very high.

Aug 08
Power Integrations (NASDAQ:POWI) Is Very Good At Capital Allocation

Power Integrations (NASDAQ:POWI) Is Very Good At Capital Allocation

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want...

Shareholder Returns

POWIUS SemiconductorUS Market
7D-0.2%0.7%3.2%
1Y-16.5%-5.2%-10.2%

Return vs Industry: POWI underperformed the US Semiconductor industry which returned -5.3% over the past year.

Return vs Market: POWI underperformed the US Market which returned -10.1% over the past year.

Price Volatility

Is POWI's price volatile compared to industry and market?
POWI volatility
POWI Average Weekly Movement6.5%
Semiconductor Industry Average Movement8.7%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: POWI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: POWI's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1988773Balu Balakrishnanhttps://www.power.com

Power Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide. The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems. It also offers high-voltage diodes; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles.

Power Integrations Fundamentals Summary

How do Power Integrations's earnings and revenue compare to its market cap?
POWI fundamental statistics
Market CapUS$4.70b
Earnings (TTM)US$184.81m
Revenue (TTM)US$715.57m

25.4x

P/E Ratio

6.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
POWI income statement (TTM)
RevenueUS$715.57m
Cost of RevenueUS$323.13m
Gross ProfitUS$392.43m
Other ExpensesUS$207.63m
EarningsUS$184.81m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.23
Gross Margin54.84%
Net Profit Margin25.83%
Debt/Equity Ratio0.0%

How did POWI perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

21%

Payout Ratio

Does POWI pay a reliable dividends?

See POWI dividend history and benchmarks
When do you need to buy POWI by to receive an upcoming dividend?
Power Integrations dividend dates
Ex Dividend DateAug 30 2022
Dividend Pay DateSep 30 2022
Days until Ex dividend16 days
Days until Dividend pay date47 days

Does POWI pay a reliable dividends?

See POWI dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is POWI 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 POWI?

Other financial metrics that can be useful for relative valuation.

POWI 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/Revenue6.1x
Enterprise Value/EBITDA18.3x
PEG Ratio40.5x

Price to Earnings Ratio vs Peers

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

POWI PE Ratio vs Peers
The above table shows the PE ratio for POWI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average19.9x
CRUS Cirrus Logic
14x5.7%US$4.9b
DIOD Diodes
13.2x3.8%US$3.8b
OLED Universal Display
32.7x15.4%US$6.0b
MTSI MACOM Technology Solutions Holdings
19.7x-40.5%US$4.3b
POWI Power Integrations
25.4x0.6%US$4.7b

Price-To-Earnings vs Peers: POWI is expensive based on its Price-To-Earnings Ratio (25.4x) compared to the peer average (19.9x).


Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: POWI is expensive based on its Price-To-Earnings Ratio (25.4x) compared to the US Semiconductor industry average (21.7x)


Price to Earnings Ratio vs Fair Ratio

What is POWI'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.

POWI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio25.4x
Fair PE Ratio15.6x

Price-To-Earnings vs Fair Ratio: POWI is expensive based on its Price-To-Earnings Ratio (25.4x) compared to the estimated Fair Price-To-Earnings Ratio (15.6x).


Share Price vs Fair Value

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

Below Fair Value: POWI ($82.21) is trading above our estimate of fair value ($50.84)

Significantly Below Fair Value: POWI 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 Power Integrations forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


0.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: POWI's forecast earnings growth (0.6% per year) is below the savings rate (1.9%).

Earnings vs Market: POWI's earnings (0.6% per year) are forecast to grow slower than the US market (14.4% per year).

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

Revenue vs Market: POWI's revenue (5.4% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: POWI's revenue (5.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: POWI's Return on Equity is forecast to be high in 3 years time (22.2%)


Discover growth companies

Past Performance

How has Power Integrations performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


29.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: POWI has high quality earnings.

Growing Profit Margin: POWI's current net profit margins (25.8%) are higher than last year (19.8%).


Past Earnings Growth Analysis

Earnings Trend: POWI's earnings have grown significantly by 29.3% per year over the past 5 years.

Accelerating Growth: POWI's earnings growth over the past year (49.3%) exceeds its 5-year average (29.3% per year).

Earnings vs Industry: POWI earnings growth over the past year (49.3%) underperformed the Semiconductor industry 56.1%.


Return on Equity

High ROE: POWI's Return on Equity (26%) is considered high.


Discover strong past performing companies

Financial Health

How is Power Integrations'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: POWI's short term assets ($481.0M) exceed its short term liabilities ($70.1M).

Long Term Liabilities: POWI's short term assets ($481.0M) exceed its long term liabilities ($28.6M).


Debt to Equity History and Analysis

Debt Level: POWI is debt free.

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

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

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


Balance Sheet


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Dividend

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

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.88%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 14 2022Ex Dividend DateAug 30 2022Dividend Pay DateSep 30 202231 days from Ex DividendBuy in the next 16 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: POWI's dividend (0.88%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: POWI's dividend (0.88%) is low compared to the top 25% of dividend payers in the US market (3.96%).


Stability and Growth of Payments

Stable Dividend: POWI's dividends per share have been stable in the past 10 years.

Growing Dividend: POWI's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (20.6%), POWI's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (21.5%), POWI's dividend payments are well covered by cash flows.


Discover strong dividend paying companies

Management

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

11.1yrs

Average management tenure


CEO

Balu Balakrishnan (67 yo)

21.33yrs

Tenure

US$6,564,685

Compensation

Mr. Balu Balakrishnan has been the Chief Executive Officer at Power Integrations Inc., since January 2002 and has been its President since April 2001. Mr. Balakrishnan served as an Interim Chief Financial...


CEO Compensation Analysis

Compensation vs Market: Balu's total compensation ($USD6.56M) is about average for companies of similar size in the US market ($USD6.55M).

Compensation vs Earnings: Balu's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: POWI's management team is seasoned and experienced (11.1 years average tenure).


Board Members

Experienced Board: POWI's board of directors are considered experienced (9.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: POWI 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.


Top Shareholders

Company Information

Power Integrations, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Power Integrations, Inc.
  • Ticker: POWI
  • Exchange: NasdaqGS
  • Founded: 1988
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Implied Market Cap: US$4.701b
  • Shares outstanding: 57.18m
  • Website: https://www.power.com

Number of Employees


Location

  • Power Integrations, Inc.
  • 5245 Hellyer Avenue
  • San Jose
  • California
  • 95138-1002
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/13 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.