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Shares of Monolithic Power Systems Inc. (MPWR - Free Report) declined more than 3% in the last couple of trading sessions following the company’s fourth-quarter 2016 results. The fall apparently exhibited investor disappointment in first-quarter 2017 guidance, which forecasts revenue decline on a sequential basis.
The company reported adjusted earnings (including stock-based compensation) of 40 cents per share, which beat the Zacks Consensus Estimate by a nickel. Notably, the company registered an earnings beat after two consecutive misses.
Moreover, earnings (excluding stock-based compensation) surged 27.5% from the year-ago quarter to 65 cents per share. The year-over-year growth in earnings was primarily driven by top-line growth and margin expansion.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Revenues advanced 19.2% year over year to $103.6 million. Gross and operating margin expanded 50 basis points (bps) and 600 bps, respectively driven by higher top-line base and stringent cost control measures.
In 2016, earnings climbed 21.7% to $2.30 per share driven by revenue growth of 16.7%, which totaled $388.7 million. The company stated that the year-over-year revenue growth compared favorably with the analog industry, which SIA estimates grew 5.8% over 2015.
However, we note that the revenue growth failed to boost share price return in the last one year. Monolithic (up 52.4%) has unperformed the Zacks Semiconductor – Analog & Mixed industry (58.9%) in the same period.
Segment Details
In terms of end-market, Consumer (36.6% of total revenue) revenues dipped 1.6% to almost $38 million. However, Industrial (24.3%), Storage and Computing (22.6%) and Communications (16.5%) increased 40.5%, 60.8% and 7.6% to $25.2 million, $23.4 million and $17 million, respectively.
In terms of product family, DC to DC (90.7% of revenue) improved 21.2% to nearly $94 million. Lighting control revenues increased 2.5% from the year-ago quarter to $9.6 million.
Guidance
Monolithic forecasts revenues in the range of $98–$102 million for first-quarter 2017, which reflects a sequential decline of 5.4–1.5%.
Non-GAAP gross margin is anticipated to be in the range of 54.8–55.8%. R&D and SG&A expenses are expected to be approximately $28.3 million and $30.3 million.
Long-term earnings growth rate for Microchip, Silicon and Maxim is currently pegged at 12.46%, 12.50% and 10.25%, respectively.
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Monolithic (MPWR) Stock Falls Despite Q4 Earnings Beat
Shares of Monolithic Power Systems Inc. (MPWR - Free Report) declined more than 3% in the last couple of trading sessions following the company’s fourth-quarter 2016 results. The fall apparently exhibited investor disappointment in first-quarter 2017 guidance, which forecasts revenue decline on a sequential basis.
The company reported adjusted earnings (including stock-based compensation) of 40 cents per share, which beat the Zacks Consensus Estimate by a nickel. Notably, the company registered an earnings beat after two consecutive misses.
Moreover, earnings (excluding stock-based compensation) surged 27.5% from the year-ago quarter to 65 cents per share. The year-over-year growth in earnings was primarily driven by top-line growth and margin expansion.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise | Monolithic Power Systems, Inc. Quote
Revenues advanced 19.2% year over year to $103.6 million. Gross and operating margin expanded 50 basis points (bps) and 600 bps, respectively driven by higher top-line base and stringent cost control measures.
In 2016, earnings climbed 21.7% to $2.30 per share driven by revenue growth of 16.7%, which totaled $388.7 million. The company stated that the year-over-year revenue growth compared favorably with the analog industry, which SIA estimates grew 5.8% over 2015.
However, we note that the revenue growth failed to boost share price return in the last one year. Monolithic (up 52.4%) has unperformed the Zacks Semiconductor – Analog & Mixed industry (58.9%) in the same period.
Segment Details
In terms of end-market, Consumer (36.6% of total revenue) revenues dipped 1.6% to almost $38 million. However, Industrial (24.3%), Storage and Computing (22.6%) and Communications (16.5%) increased 40.5%, 60.8% and 7.6% to $25.2 million, $23.4 million and $17 million, respectively.
In terms of product family, DC to DC (90.7% of revenue) improved 21.2% to nearly $94 million. Lighting control revenues increased 2.5% from the year-ago quarter to $9.6 million.
Guidance
Monolithic forecasts revenues in the range of $98–$102 million for first-quarter 2017, which reflects a sequential decline of 5.4–1.5%.
Non-GAAP gross margin is anticipated to be in the range of 54.8–55.8%. R&D and SG&A expenses are expected to be approximately $28.3 million and $30.3 million.
Zacks Rank & Key Picks
Monolithic carries a Zacks Rank #3 (Hold). Better-ranked stocks are Microchip (MCHP - Free Report) , Silicon Laboratories (SLAB - Free Report) and Maxim . While both Microchip and Silicon sports a Zacks Rank #1 (Strong Buy), Maxim carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Microchip, Silicon and Maxim is currently pegged at 12.46%, 12.50% and 10.25%, respectively.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>