Rosenblatt cuts Monolithic Power stock target to $750

Friday - Rosenblatt Securities has adjusted its price target for Monolithic Power Systems (NASDAQ:MPWR) shares, reducing it to $750 from the previous $800, while maintaining a Neutral rating. Currently trading at $609, the stock sits between its 52-week range of $547-$960, with analyst targets ranging from $665 to $1,100. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value calculations. The adjustment follows Monolithic Power’s Investor Day, where the company outlined its strategy for sustainable long-term revenue growth and continued innovation.

Monolithic Power Systems, known for its leading-edge semiconductor solutions, emphasized its ongoing efforts to stay ahead of competitors by fostering product innovation and expanding into new markets. The company’s development of platforms and products aimed at improving total cost of ownership (TCO) is expected to contribute to its long-term revenue growth, which is projected to outpace the semiconductor industry by 10% to 15%. This ambition is supported by the company’s strong track record, with revenue growing 21.2% in the last twelve months and maintaining an impressive five-year revenue CAGR of 29%. InvestingPro data reveals 14 additional key insights about MPWR’s growth potential and financial health, which earned a "GREAT" overall score.

The company also updated its first-quarter 2025 guidance, indicating that revenues are tracking $15 million above the initial February forecast. Despite limited visibility into the second half of 2025 within the Enterprise Data segment, Monolithic Power highlighted its strong relationship with its principal customer.

Rosenblatt’s analysis acknowledges Monolithic Power’s advantageous position to meet the increasing demand for efficient power solutions across various end-markets. However, the firm noted that the success of the AI aspects of Monolithic Power’s business hinges on precise execution and timing in the latter half of 2025. The revised price target of $750 is grounded on a mid-30s price-to-earnings (P/E) multiple applied to the fiscal year 2026 earnings estimates.

In other recent news, Monolithic Power Systems has updated its financial guidance for the first quarter ending March 31, 2025, projecting revenue between $630 million and $640 million, an increase from the previous range of $610 million to $630 million. The company also adjusted its GAAP operating expenses to be between $184.9 million and $190.9 million, while non-GAAP operating expenses are expected to range from $131.6 million to $135.6 million. Citi analysts have reiterated a Buy rating on Monolithic Power Systems with an $800 price target, highlighting the company’s increased sales guidance and its focus on non-AI markets such as Automotive, Industrial, and Communications. Stifel also maintained a Buy rating with a $1,100 target, expressing confidence in the company’s innovation strategy and market leadership. Truist Securities reaffirmed their Buy rating with a $897 target, anticipating that Monolithic Power Systems will continue to emphasize its growth strategy and introduce emerging products. These developments come as Monolithic Power Systems hosted its Analyst Day, where it discussed its corporate strategy and financial metrics. The company aims to outpace market growth by 10-15% from 2025 to 2027, despite challenges in its Enterprise Data segment. Analysts remain optimistic about Monolithic Power Systems’ diversified business model and its potential for continued success in the power solutions sector.

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