Monolithic Power Systems Inc (MPWR, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising market position. With a current share price of $745.99 and a daily gain of 2.18%, coupled with a three-month change of 4.64%, the company's financial health is robust. A detailed analysis, supported by the GF Score, indicates that Monolithic Power Systems Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These aspects have been backtested from 2006 to 2021, showing a strong correlation with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. Monolithic Power Systems Inc boasts a GF Score of 94 out of 100, indicating a high potential for market outperformance.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc, with a market cap of $36.31 billion and annual sales of $1.83 billion, is a leading analog and mixed-signal chipmaker specializing in power management solutions. The company aims to reduce total energy consumption across various end markets, including computing, automotive, industrial, communications, and consumer sectors. Utilizing a fabless manufacturing model, Monolithic Power Systems Inc partners with third-party chip foundries to leverage its proprietary BCD process technology.
Financial Strength Breakdown
Monolithic Power Systems Inc's financial resilience is evident in its robust balance sheet and strategic debt management, with a Debt-to-Revenue ratio of 0. This prudent financial management is further underscored by an impressive Altman Z-Score of 48.47, indicating a strong buffer against financial distress.
Profitability Rank Breakdown
The company's profitability is exceptional, with an Operating Margin of 26.45% in 2023, reflecting a significant increase from 16.73% in 2019. This trend is mirrored in its Gross Margin, which has consistently improved over the past five years, demonstrating Monolithic Power Systems Inc's increasing efficiency in converting revenue into profit.
Growth Rank Breakdown
Monolithic Power Systems Inc is distinguished by its strong growth metrics. The company's 3-Year Revenue Growth Rate of 27.6% is notably higher than 84.96% of its peers in the Semiconductors industry. This is complemented by a robust increase in EBITDA, highlighting the company's sustained growth trajectory.
Conclusion
Given Monolithic Power Systems Inc's strong financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the 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.
