In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Monolithic Power Systems MPWR alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Monolithic Power Systems Background
Monolithic Power Systems 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Monolithic Power Systems Inc | 106.34 | 19.83 | 23.05 | 4.66% | $0.13 | $0.28 | 15.03% |
| NVIDIA Corp | 54.51 | 49.04 | 30.06 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 30.77 | 7.60 | 11.82 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 139.69 | 12.30 | 17.13 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 186.61 | 4.49 | 11.03 | 0.47% | $1.12 | $2.86 | 8.88% |
| Texas Instruments Inc | 35.33 | 10.81 | 11.62 | 6.59% | $1.76 | $2.21 | -15.65% |
| Qualcomm Inc | 21.22 | 7.49 | 5.02 | 8.67% | $2.87 | $5.22 | 11.15% |
| ARM Holdings PLC | 350.29 | 26.23 | 42.47 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 68.08 | 3.19 | 11.63 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 94 | 0.84 | 1.74 | -1.46% | $0.86 | $4.55 | -0.9% |
| Microchip Technology Inc | 30.70 | 6.45 | 6.39 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 15.89 | 3.58 | 3.94 | 4.11% | $0.58 | $0.78 | -17.15% |
| First Solar Inc | 22.26 | 3.68 | 7.12 | 4.94% | $0.48 | $0.5 | 24.65% |
| STMicroelectronics NV | 7.34 | 1.41 | 1.71 | 3.51% | $1.31 | $1.15 | -25.29% |
| GLOBALFOUNDRIES Inc | 26.95 | 1.93 | 3.18 | 1.38% | $0.56 | $0.4 | -11.54% |
| ASE Technology Holding Co Ltd | 19.89 | 2.27 | 1.18 | 2.62% | $26.08 | $23.07 | 2.91% |
| United Microelectronics Corp | 12.87 | 1.91 | 3.01 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 20.27 | 2.47 | 3.62 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 45.69 | 6.62 | 16.28 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 108.10 | 7.15 | 11.49 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.46 | 10.31 | 11.59 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 23.11 | 3.59 | 3.76 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 64.38 | 8.26 | 10.28 | 4.26% | $26.95 | $21.6 | 7.64% |
Through a detailed examination of Monolithic Power Systems, we can deduce the following trends:
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Notably, the current Price to Earnings ratio for this stock, 106.34, is 1.65x above the industry norm, reflecting a higher valuation relative to the industry.
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The elevated Price to Book ratio of 19.83 relative to the industry average by 2.4x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 23.05, which is 2.24x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 4.66% that is 0.4% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $130 Million, which is 0.0x below the industry average, potentially indicating lower profitability or financial challenges.
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The gross profit of $280 Million is 0.01x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 15.03% is notably higher compared to the industry average of 7.64%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By evaluating Monolithic Power Systems against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Monolithic Power Systems is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.01.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
For Monolithic Power Systems, the PE, PB, and PS ratios are all high compared to industry peers, indicating potentially overvalued stock. On the other hand, the high ROE and revenue growth suggest strong performance relative to competitors. However, the low EBITDA and gross profit levels may raise concerns about the company's operational efficiency and profitability.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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