Monolithic Power Systems Inc (MPWR, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $606, Monolithic Power Systems Inc has witnessed a daily loss of 0.6%, marked against a three-month change of -26.98%. A thorough analysis, underlined by the GF Score, suggests that Monolithic Power Systems Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 9/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have a positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. GuruFocus assigned Monolithic Power Systems Inc the GF Score of 99 out of 100, which signals the highest outperformance potential.
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc 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. With a market cap of $29.56 billion and sales amounting to $2.04 billion, Monolithic Power Systems Inc has an operating margin of 23.81%, reflecting its efficient business operations.
Financial Strength Breakdown
According to the Financial Strength rating, Monolithic Power Systems Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 36.93, Monolithic Power Systems Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.01, Monolithic Power Systems Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Monolithic Power Systems Inc's impressive standing among its peers in generating profit. Monolithic Power Systems Inc's Operating Margin has increased by 31.18% over the past five years, as shown by the following data: 2020: 19.74; 2021: 21.73; 2022: 29.36; 2023: 26.45; 2024: 21.94. Monolithic Power Systems Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Monolithic Power Systems Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 27.6%, which outperforms better than 83.64% of 929 companies in the Semiconductors industry. Moreover, Monolithic Power Systems Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 39.4, and the rate over the past five years is 38.9. This trend accentuates the company's continued capability to drive growth.
Conclusion
Monolithic Power Systems Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. The company's strategic initiatives, robust financial health, and consistent growth trajectory make it a compelling choice for investors seeking long-term value. As the semiconductor industry continues to evolve, Monolithic Power Systems Inc is well-equipped to capitalize on emerging opportunities, ensuring sustained growth and market leadership. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
