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Monolithic Power (MPWR) Up 1.8% Since Earnings Report: Can It Continue?
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About a month has gone by since the last earnings report for Monolithic Power Systems, Inc. (MPWR - Free Report) . Shares have added about 1.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Monolithic reported third-quarter 2017 earnings of 84 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 27.3% from the year-ago quarter.
Revenues jumped 21.1% from the year-ago quarter to almost $129 million, slightly better than the Zacks Consensus Estimate of $126 million. The figure was better than management’s guidance of $124-$128 million.
DC to DC segment (92.4% of total revenues) revenues increased 24.6% year over year to $119.1 million. Lighting Control (7.6% of total revenues) climbed 9.1% to $9.9 million.
Consumer (42.9% of total revenues) revenues grew 26.8% from the year-ago quarter to $55.3 million. The year-over-year growth reflected sales gains in high-end consumer applications.
Computing & Storage (22.5% of total revenues) revenues rose 23.7% to $29 million. The growth was attributed to strong sales in cloud computing. The company experienced a significant increase in product sales, reflecting both new design wins and increased dollar content.
Industrial (12.7% of total revenues) revenues grew 12.6% to $16.3 million, driven by increased sales of AC/DC power applications.
Automotive (10% of total revenues) revenues were $12.9 million, up 48.8% from the year-ago quarter. The upside was driven by higher product sales for applications in infotainment, safety and connectivity application products.
Management stated that Automotive is Monolithic’s largest SAM opportunity at $6 billion. The company plans to offer a number of new products for applications in body controls, lighting, infotainment and ADAS.
However, Communications (11.9% of total revenues) revenues declined 5% to $15.4 million.
Gross margin expanded 40 basis points (bps) to 55.7% in the reported quarter. The figure was within management’s guidance of 55.2-56.2%
Operating expenses, as a percentage of revenues, declined 210 bps to 25.5%.
Operating margin expanded 250 bps from the year-ago quarter to 30.2%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $305 million at the end of third-quarter 2017 as compared with $283 million at the end of the previous quarter.
Monolithic generated operating cash flow of about $33.7 million compared with $24.9 million in the previous quarter.
Guidance
For the fourth quarter of 2017, Monolithic forecasts revenues in the range of $123-$129 million. Non-GAAP gross margin is projected between 55.2% and 56.2%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
Monolithic Power Systems, Inc. Price and Consensus
Currently, Monolithic Power's stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a D. The stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months
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Monolithic Power (MPWR) Up 1.8% Since Earnings Report: Can It Continue?
About a month has gone by since the last earnings report for Monolithic Power Systems, Inc. (MPWR - Free Report) . Shares have added about 1.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Monolithic reported third-quarter 2017 earnings of 84 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 27.3% from the year-ago quarter.
Revenues jumped 21.1% from the year-ago quarter to almost $129 million, slightly better than the Zacks Consensus Estimate of $126 million. The figure was better than management’s guidance of $124-$128 million.
DC to DC segment (92.4% of total revenues) revenues increased 24.6% year over year to $119.1 million. Lighting Control (7.6% of total revenues) climbed 9.1% to $9.9 million.
Consumer (42.9% of total revenues) revenues grew 26.8% from the year-ago quarter to $55.3 million. The year-over-year growth reflected sales gains in high-end consumer applications.
Computing & Storage (22.5% of total revenues) revenues rose 23.7% to $29 million. The growth was attributed to strong sales in cloud computing. The company experienced a significant increase in product sales, reflecting both new design wins and increased dollar content.
Industrial (12.7% of total revenues) revenues grew 12.6% to $16.3 million, driven by increased sales of AC/DC power applications.
Automotive (10% of total revenues) revenues were $12.9 million, up 48.8% from the year-ago quarter. The upside was driven by higher product sales for applications in infotainment, safety and connectivity application products.
Management stated that Automotive is Monolithic’s largest SAM opportunity at $6 billion. The company plans to offer a number of new products for applications in body controls, lighting, infotainment and ADAS.
However, Communications (11.9% of total revenues) revenues declined 5% to $15.4 million.
Gross margin expanded 40 basis points (bps) to 55.7% in the reported quarter. The figure was within management’s guidance of 55.2-56.2%
Operating expenses, as a percentage of revenues, declined 210 bps to 25.5%.
Operating margin expanded 250 bps from the year-ago quarter to 30.2%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $305 million at the end of third-quarter 2017 as compared with $283 million at the end of the previous quarter.
Monolithic generated operating cash flow of about $33.7 million compared with $24.9 million in the previous quarter.
Guidance
For the fourth quarter of 2017, Monolithic forecasts revenues in the range of $123-$129 million. Non-GAAP gross margin is projected between 55.2% and 56.2%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
Monolithic Power Systems, Inc. Price and Consensus
Monolithic Power Systems, Inc. Price and Consensus | Monolithic Power Systems, Inc. Quote
VGM Scores
Currently, Monolithic Power's stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a D. The stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months