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 $749.89, Monolithic Power Systems Inc has witnessed a daily loss of 0.32%, marked against a three-month change of 56.31%. 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: 10/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 10/10
Monolithic Power Systems Inc's GF Score is particularly impressive in areas of financial strength, profitability, and growth, each scoring a perfect 10 out of 10. However, its GF Value rank is lower at 3 out of 10, suggesting that the stock might be overvalued at the current price. Despite this, the overall GF Score of 95 out of 100 signals the highest outperformance potential.
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc, with a market cap of $36.02 billion and sales of $1.82 billion, 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.
Financial Strength Breakdown
Monolithic Power Systems Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an interest coverage ratio significantly high due to no long-term debt, the company stands well above the preferred threshold set by legendary investor Benjamin Graham. The Altman Z-Score of 58.21 further exhibits a strong defense against financial distress, highlighting its robust financial stability. Additionally, with a Debt-to-Revenue ratio of 0, 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. The Operating Margin has increased to 26.45% in 2023, up from 16.73% in 2019, indicating growing efficiency. Similarly, the Gross Margin has consistently risen over the past five years, underscoring the company's growing proficiency in transforming revenue into profit. Monolithic Power Systems Inc's Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Monolithic Power Systems Inc demonstrates a strong commitment to expanding its business, as evidenced by its high Growth Rank. The company's 3-Year Revenue Growth Rate of 39.3% outperforms 90.42% of companies in the Semiconductors industry. Moreover, the robust increase in EBITDA over the past few years, with a three-year growth rate of 65.3, accentuates the company's continued capability to drive growth.
Conclusion: Monolithic Power Systems Inc's Path to Outperformance
Considering Monolithic Power Systems Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking companies with similar robust financial health can explore more options using the GF Score Screen. With its strong market position and consistent performance, Monolithic Power Systems Inc stands as a compelling choice for value investors looking to capitalize on financial growth and competitive advantage.
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.
