US$737 - That's What Analysts Think Monolithic Power Systems, Inc. (NASDAQ:MPWR) Is Worth After These Results
Shareholders of Monolithic Power Systems, Inc. (NASDAQ:MPWR) will be pleased this week, given that the stock price is up 18% to US$752 following its latest yearly results. Revenues of US$1.8b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$8.76, missing estimates by 2.5%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Monolithic Power Systems
Taking into account the latest results, the most recent consensus for Monolithic Power Systems from 14 analysts is for revenues of US$2.04b in 2024. If met, it would imply a decent 12% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 2.5% to US$9.13. Before this earnings report, the analysts had been forecasting revenues of US$2.03b and earnings per share (EPS) of US$10.10 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Despite cutting their earnings forecasts,the analysts have lifted their price target 18% to US$737, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Monolithic Power Systems analyst has a price target of US$830 per share, while the most pessimistic values it at US$540. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Monolithic Power Systems' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. Factoring in the forecast slowdown in growth, it seems obvious that Monolithic Power Systems is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Monolithic Power Systems. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Monolithic Power Systems' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Monolithic Power Systems going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Monolithic Power Systems that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
