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 $683.32, Monolithic Power Systems Inc has witnessed a daily gain of 0.29%, marked against a three-month change of 16.39%. 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: 5/10
- Momentum rank: 9/10
Monolithic Power Systems Inc has been assigned a GF Score of 97 out of 100, which signals the highest outperformance potential. This score reflects the company's strong financial strength, exceptional profitability, and impressive growth, although its GF Value rank indicates a moderate valuation relative to the market.
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc, with a market cap of $33.25 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. The company's operating margin stands at a healthy 26.45%, reflecting its efficiency and profitability.
Financial Strength Breakdown
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 54.53, the company exhibits a strong defense against financial distress, highlighting its robust financial stability. Additionally, with a favorable 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 company's Operating Margin has increased significantly over the past five years, and its Gross Margin has also seen a consistent rise. This trend underscores the company's growing proficiency in transforming revenue into profit. 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 83.54% of companies in the Semiconductors industry. Moreover, Monolithic Power Systems Inc has seen a robust increase in its EBITDA over the past few years, emphasizing its continued capability to drive growth.
Conclusion: A Strong Investment Contender
Considering Monolithic Power Systems Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic approach to financial management, consistent profitability, and sustained growth trajectory make it a compelling choice for value investors. With a GF Score near the pinnacle of perfection, Monolithic Power Systems Inc stands as a testament to what savvy investors seek in a robust investment opportunity.
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.
