In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Monolithic Power Systems MPWR alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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 | 110.74 | 20.65 | 24.01 | 4.66% | $0.13 | $0.28 | 15.03% |
| NVIDIA Corp | 59.88 | 53.87 | 33.02 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.75 | 8.09 | 12.58 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 141.53 | 12.46 | 17.35 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 203.56 | 4.89 | 12.03 | 0.47% | $1.12 | $2.86 | 8.88% |
| Qualcomm Inc | 21.35 | 7.54 | 5.05 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 34.88 | 10.67 | 11.47 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 349.20 | 26.15 | 42.34 | 4.07% | $0.23 | $0.91 | 39.11% |
| Micron Technology Inc | 147.13 | 2.53 | 4.59 | 1.99% | $3.63 | $2.74 | 93.27% |
| Analog Devices Inc | 68.27 | 3.20 | 11.66 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 93.33 | 0.83 | 1.73 | -1.46% | $0.86 | $4.55 | -0.9% |
| Microchip Technology Inc | 30.46 | 6.40 | 6.34 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 16.20 | 3.65 | 4.01 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 7.42 | 1.43 | 1.72 | 3.51% | $1.31 | $1.15 | -25.29% |
| First Solar Inc | 20.50 | 3.39 | 6.56 | 4.94% | $0.48 | $0.5 | 24.65% |
| GLOBALFOUNDRIES Inc | 27.21 | 1.95 | 3.21 | 1.38% | $0.56 | $0.4 | -11.54% |
| ASE Technology Holding Co Ltd | 19.79 | 2.26 | 1.17 | 2.62% | $26.08 | $23.07 | 2.91% |
| United Microelectronics Corp | 12.50 | 1.86 | 2.92 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 19.72 | 2.41 | 3.52 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 44.98 | 6.51 | 16.02 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 110.90 | 7.33 | 11.78 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.06 | 10.20 | 11.47 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 21.80 | 3.39 | 3.54 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 69.16 | 8.23 | 10.19 | 4.16% | $25.89 | $20.74 | 11.53% |
When closely examining Monolithic Power Systems, the following trends emerge:
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Notably, the current Price to Earnings ratio for this stock, 110.74, is 1.6x above the industry norm, reflecting a higher valuation relative to the industry.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 20.65 which exceeds the industry average by 2.51x.
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With a relatively high Price to Sales ratio of 24.01, which is 2.36x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 4.66% is 0.5% above the industry average, highlighting 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 0.01x below the industry average, potentially indicating lower profitability or financial challenges.
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The company has lower gross profit of $280 Million, which indicates 0.01x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 15.03% exceeds the industry average of 11.53%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.
When evaluating Monolithic Power Systems alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Among its top 4 peers, Monolithic Power Systems has a stronger financial position with a lower debt-to-equity ratio of 0.01.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Monolithic Power Systems, the PE, PB, and PS ratios are all high compared to industry peers, indicating overvaluation. On the other hand, the high ROE and revenue growth suggest strong performance relative to competitors. However, the low EBITDA and gross profit levels 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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