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 $439.99, Monolithic Power Systems Inc has witnessed a daily loss of 0.4%, marked against a three-month change of -20.19%. 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.
Monolithic Power Systems Inc has achieved high ranks in all five aspects of the GF Score, with a perfect score of 10/10 in Financial Strength, Profitability, Growth, and GF Value. The company's Momentum rank is slightly lower at 9/10. As a result, GuruFocus assigned Monolithic Power Systems Inc the GF Score of 100 out of 100, which signals the highest outperformance potential.
Understanding Monolithic Power Systems Inc Business
Monolithic Power Systems Inc, with a market cap of $21.08 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 sales stand at $1.85 billion, with an operating margin of 28.72%.
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. The company's Interest Coverage ratio is significantly high due to no long-term debt. With an Altman Z-Score of 36.19, Monolithic Power Systems Inc exhibits a strong defense against financial distress. Furthermore, with a favorable Debt-to-Revenue ratio of 0, the company'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 (50.41%) over the past five years. Furthermore, the company's Gross Margin has seen a consistent rise over the past five years. This trend underscores the company's growing proficiency in transforming revenue into profit. Monolithic Power Systems Inc's strong Predictability Rank of 4.0 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 39.3%, which outperforms better than 90.85% of 874 companies in the Semiconductors industry. Moreover, the company has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years.
Next Steps
Given the company's strong financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. For investors seeking more companies with strong GF Scores, consider becoming a GuruFocus Premium member and explore 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.
