How are energy investors positioned?
On Friday, Monolithic Power Systems (NASDAQ:MPWR) shares were poised to move following an updated price target from Citi. Analysts at the firm increased the target to $700 from the previous $615, while reiterating a Buy rating on the stock. According to InvestingPro data, analyst targets currently range from $600 to $925, with 13 analysts recently revising their earnings expectations upward.
Monolithic Power Systems reported its first-quarter results for 2025 yesterday, after the market closed, showcasing strong performance. The company announced that its sales for the second quarter of 2025 are projected to surpass consensus estimates, though there was a slight shortfall in gross margin expectations. InvestingPro analysis reveals the company maintains excellent financial health with a "GREAT" overall score, supported by strong profitability metrics including a 55.32% gross margin.
Despite the robust top-line performance, Citi analysts anticipate that share price fluctuations for Monolithic Power Systems may continue until the second half of 2025. This is when the company expects a significant increase in sales from the Enterprise Data end market.
Citi’s confidence in Monolithic Power Systems remains firm, with expectations that the company will outperform its peers by 10-15%. The Buy rating has been maintained as a result of this outlook, signaling Citi’s positive stance on the company’s prospects.
Investors will be watching Monolithic Power Systems closely to see if the company can maintain its momentum and achieve the sales growth anticipated in the latter part of the year, which is expected to stabilize the stock’s performance.
In other recent news, Monolithic Power Systems reported first-quarter 2025 earnings that exceeded analyst expectations, with an EPS of $4.04 compared to the anticipated $4.00. Revenue for the quarter reached $637.6 million, surpassing projections of $631.16 million, marking a 39.2% increase year-over-year. Despite these positive financial results, the company’s stock experienced a decline in after-hours trading. The company has been expanding its manufacturing and R&D centers outside China to mitigate geopolitical risks, reflecting its strategic shift towards high-margin, innovative product development. Notably, the storage and computing segment saw a significant 38% quarter-over-quarter revenue increase. Analysts from firms like Stifel have shown interest in the company’s enterprise data segment, which Monolithic Power Systems expects to ramp up later in the year. The company is also transitioning from silicon-only solutions to comprehensive modular systems, aiming to capitalize on emerging market opportunities. These developments highlight Monolithic Power Systems’ ongoing efforts to adapt to market changes and sustain growth.
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