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 $644.91, Monolithic Power Systems Inc has witnessed a daily gain of 1.42%, marked against a three-month change of 35.01%. 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: 5/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have 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. With high ranks in financial strength, profitability, and growth, and a slightly lower GF Value rank, GuruFocus assigned Monolithic Power Systems Inc the GF Score of 98 out of 100, which signals the highest outperformance potential.
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc, with a market cap of $30.90 billion and sales of $1.83 billion, operates as an analog and mixed-signal chipmaker, specializing in power management solutions. The company's mission is to reduce total energy consumption in end systems, serving the computing, automotive, industrial, communications, and consumer end markets. Monolithic Power Systems Inc uses a fabless manufacturing model, partnering with third-party chip foundries to host its proprietary BCD process technology. With an operating margin of 28.3%, the company's financials reflect a strong competitive position in the semiconductor industry.
Financial Strength Breakdown
Monolithic Power Systems Inc's Financial Strength rating is impeccable, with a perfect score of 10/10. The company's Interest Coverage ratio is significantly high, reflecting its strong earnings and absence of long-term debt. With an Altman Z-Score of 50.54, Monolithic Power Systems Inc is far from financial distress, and its Debt-to-Revenue ratio of 0 indicates a strategic approach to debt management, further solidifying its financial health.
Profitability Rank Breakdown
The Profitability Rank of Monolithic Power Systems Inc is another area where the company shines, with a score of 10/10. The company's Operating Margin has shown a remarkable increase over the past five years, and its Gross Margin has consistently risen, indicating an increasing ability to convert revenue into profit. Additionally, Monolithic Power Systems Inc's Predictability Rank of 4.0 stars out of five reflects its steady operational performance and reliability for investors.
Growth Rank Breakdown
Monolithic Power Systems Inc's high Growth Rank demonstrates its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 39.3% outperforms 90.42% of its peers in the Semiconductors industry. The robust increase in EBITDA over the past few years, with a three-year growth rate of 65.3, highlights Monolithic Power Systems Inc's capability to drive growth and profitability.
Next Steps
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 looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen. Monolithic Power Systems Inc's strategic market position, coupled with its financial and operational excellence, makes it a compelling choice for value investors seeking growth and stability.
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.
