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On Monday, Truist Securities reaffirmed its positive stance on Monolithic Power Systems (NASDAQ:MPWR), maintaining a Buy rating and a price target of $897.00. Following the company’s analyst day on March 20, the firm highlighted Monolithic Power’s status as a leading innovator in the analog semiconductor sector. Despite the event not providing the positive catalyst some anticipated, Truist Securities emphasized the company’s continued strength in product innovation, which is seen as a key driver of revenue growth. This optimistic outlook aligns with broader analyst sentiment, as InvestingPro data shows 11 analysts have recently revised their earnings expectations upward, with analyst targets ranging from $665 to $1,100.
The analyst from Truist Securities projected that Monolithic Power Systems is poised to achieve approximately 20% sales growth and low-20s percentage EPS growth over a business cycle. This outlook appears well-founded, as InvestingPro data reveals the company achieved 21.2% revenue growth in the last twelve months, with a robust gross profit margin of 55.3%. This performance, according to the firm, justifies a premium price-to-earnings (P/E) multiple for the company’s stock. The price target of $897 is based on a 45x P/E multiple, which includes a 10x discount compared to peers in the high-growth semiconductor space.
Monolithic Power Systems’ commitment to innovation was the standout point from the analyst day, with Truist Securities expressing confidence in the company’s ability to maintain its edge in the market. The firm’s projection of continued robust sales and EPS growth reflects this sentiment, indicating a belief in Monolithic Power’s strong fundamentals and potential for sustained financial performance. This confidence is supported by the company’s impressive financial health metrics, earning a "GREAT" overall score from InvestingPro, with particularly strong marks in profitability and cash flow management.
The analyst’s expectations for Monolithic Power’s earnings per share (EPS) remain unchanged for the calendar year 2026, with an estimate of $19.93. The reaffirmed price target suggests that Truist Securities sees substantial upside potential for the stock, maintaining its recommendation for investors to buy shares of Monolithic Power Systems.
Investors and market watchers will likely keep an eye on Monolithic Power Systems as it strives to fulfill these growth projections and maintain its competitive position as an innovator within the analog semiconductor industry. The company’s stock performance will continue to be a focal point for those following the sector’s developments and Truist Securities’ analysis.
In other recent news, Monolithic Power Systems has updated its first-quarter revenue guidance to $635 million, an increase from the previous estimate of $620 million, as reported by KeyBanc analysts. The company is projecting long-term revenue growth to outpace the market by 15-20%, with gross margins expected to remain between 55-60%. Needham analysts have maintained a Buy rating with a price target of $800, citing increased guidance for the first quarter of 2025 due to strong demand and growth in Enterprise Data. Stifel analysts also reiterated a Buy rating with a $1,100 price target, expressing confidence in the company’s market position and innovation strategy. Conversely, Rosenblatt Securities adjusted their price target to $750, maintaining a Neutral rating while recognizing Monolithic Power’s strong market position and the challenges in the AI segment. The company continues to focus on innovation and expansion into new markets, as highlighted during its recent Analyst Day event. Monolithic Power Systems is also enhancing its presence in the automotive sector, aiming to capitalize on the shift to 48-volt systems. Despite some uncertainties, analysts seem optimistic about the company’s strategic initiatives and growth potential.
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