Monolithic Power Systems: Analysts Stay Bullish Despite Recent Slump
Shares of Monolithic Power Systems (MPWR) have declined over 30% since their Q3 earnings report, attributed to modest Q4 projections and potential sales reduction to Nvidia.
Analysts Maintain Buy Ratings
Despite the decline, analysts remain optimistic due to:
* Expanding AI-related customer market
* Solid AI-related growth potential
* Consistent execution
* Above-industry growth
* Diverse growth drivers
Deutsche Bank, in particular, has added MPWR to its "top picks" list, citing these factors and a potential price target of $900.
Q4 Projections and Nvidia Sales Impact
While Monolithic beat Q3 earnings estimates, its flat Q4 revenue projections led to a 17% stock drop. Additionally, reports of Nvidia considering reducing purchases from Monolithic further dented its value.
AI Market Outlook and Growth Catalysts
Analysts believe that even if Monolithic loses share with Nvidia, the expanding AI market offers significant growth opportunities. They highlight the company's diverse growth drivers and sustainable margin expansion potential as key factors justifying its valuation.
Analyst Consensus and Price Target
Out of 11 analysts tracked by Visible Alpha, 10 rate MPWR as a "buy," with an average price target of $822.91, representing a premium of over 30% to its current market price.
Upcoming Earnings Report
Monolithic is expected to release its Q4 earnings report on February 6 after market close.