In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Monolithic Power Systems MPWR vis-à-vis its key competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in 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 | 105.15 | 19.61 | 22.80 | 4.66% | $0.13 | $0.28 | 15.03% |
| NVIDIA Corp | 67.37 | 60.62 | 37.16 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 35.90 | 8.42 | 13.79 | 8.36% | $360.77 | $439.35 | 38.95% |
| Broadcom Inc | 145.39 | 12.80 | 17.82 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 187.98 | 4.52 | 11.11 | 0.47% | $1.12 | $2.86 | 8.88% |
| Qualcomm Inc | 21.61 | 7.63 | 5.11 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 33.93 | 10.38 | 11.16 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 376.56 | 28.19 | 45.66 | 4.07% | $0.23 | $0.91 | 39.11% |
| Micron Technology Inc | 155.83 | 2.68 | 4.86 | 1.99% | $3.63 | $2.74 | 93.27% |
| Analog Devices Inc | 67.97 | 3.18 | 11.61 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 95.17 | 0.85 | 1.76 | -1.46% | $0.86 | $4.55 | -0.9% |
| Microchip Technology Inc | 29.95 | 6.30 | 6.23 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 15.29 | 3.45 | 3.79 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 7.22 | 1.39 | 1.68 | 3.51% | $1.31 | $1.15 | -25.29% |
| ASE Technology Holding Co Ltd | 20.71 | 2.37 | 1.23 | 2.62% | $26.08 | $23.07 | 2.91% |
| GLOBALFOUNDRIES Inc | 27.40 | 1.96 | 3.23 | 1.38% | $0.56 | $0.4 | -11.54% |
| First Solar Inc | 17.52 | 2.90 | 5.60 | 4.94% | $0.48 | $0.5 | 24.65% |
| United Microelectronics Corp | 11.80 | 1.75 | 2.76 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 20 | 2.44 | 3.57 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 43.89 | 6.36 | 15.64 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 115.23 | 7.62 | 12.24 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.42 | 10.30 | 11.58 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 23.29 | 3.62 | 3.79 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 70.84 | 8.62 | 10.52 | 4.23% | $20.73 | $24.43 | 11.48% |
By analyzing Monolithic Power Systems, we can infer the following trends:
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The current Price to Earnings ratio of 105.15 is 1.48x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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With a Price to Book ratio of 19.61, which is 2.27x the industry average, Monolithic Power Systems might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock's relatively high Price to Sales ratio of 22.8, surpassing the industry average by 2.17x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 4.66% that is 0.43% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $130 Million is 0.01x below the industry average, suggesting potential 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 11.48%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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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Monolithic Power Systems exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.01.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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 may raise concerns about 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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