Monolithic Power Systems stock profile
Monolithic Power Systems, Inc. (MPS) is a publicly traded company known for designing, developing, and marketing power management solutions. Here are some key points about MPS:
1. Industry: MPS operates in the semiconductor industry, specifically focusing on power management products.
2. Products: The company offers a wide range of products, including DC-DC converters, LED drivers, motor drivers, and various other power management ICs (integrated circuits).
3. Market Position: MPS is recognized for its innovative solutions and has a strong presence in various sectors, including consumer electronics, automotive, industrial, and telecommunications.
4. Financial Performance: MPS has experienced growth in revenue and profitability, supported by increasing demand for energy-efficient power management solutions.
Monolithic Power Systems Results
Monolithic Revenue Growth Acceleration Expected to Continue in Q4
Monolithic Power Systems NASDAQ: MPWR. The company specializes in making chips that regulate power efficiency within a system, including those in data centers. This stock has also had a great 2024, providing investors with a total return of nearly 46%. The company’s sales are recovering, increasing 15% in Q2 after four quarters of negative or just slightly positive growth. The company’s Q3 earnings release on Oct. 30 showed revenue increasing nearly 31%, which was 5% higher than estimates.
Growth is expected to accelerate further in the last quarter of 2024, with analysts expecting a 34% increase. Although growth is expected to moderate to 21% in 2025 and 18% in 2026, those are still solid numbers, especially considering the expected 25% increase in adjusted earnings per share.
Monolithic Power Systems stock quote
On October 31, 2024, Monolithic Power Systems shares plummeted
Shares of Monolithic Power Systems (MPWR 0.01%) plunged on Thursday, down 18.2% as of 1:39 p.m. ET.
The company reported earnings last night, and while reported results showed strong growth beating expectations, Monolithic’s fourth-quarter outlook may have disappointed. Furthermore, the company received an ominous downgrade today.
A beat, but perhaps fleeting
In the third quarter, Monolithic reported revenue growth of 30.6% to $620.1 million, with earnings per share growing 31.8% to $4.08. Both figures handily beat analyst expectations.
However, Monolithic’s forecast for fourth-quarter revenue only amounted to $610 million at the midpoint, implying a quarter-to-quarter drop.
While the muted fourth-quarter revenue outlook may be attributed to the delay in Nvidia Blackwell chips, Monolithic didn’t have much room for error, as the stock had just about doubled over the past year, trading at over 100 times trailing earnings and 50 times forward earnings estimates going into the report.
Of note, Monolithic makes the semiconductor-based power solutions that go into a variety of growth markets, including data centers, automotive applications, and consumer and industrial electronics.
On the subject of the Nvidia chip, one Wall Street analyst downgraded the stock based on increasing competition for Nvidia systems. Rosenblatt’s Hans Mosesmann downgraded Monolithic from buy to neutral on Thursday, citing the fact that Monolithic will likely cede some market share in the Blackwell module to competitors Infineon and Renesas in the future.
Monolithic is a name to watch on the sell-off
Thursday was a very bad day in general for semiconductor stocks, and at around $743 per share as of this writing, Monolithic trades well below even the lowest sell-side analyst price target of $880 today.
Certainly, it seems Monolithic’s technology is well positioned, given the extreme power needs of AI data centers and electric vehicles. Therefore, investors should put this one on the watch list after the post-earnings swoon.