Monolithic Power (MPWR) AI Stock Analysis

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Monolithic Power

(NASDAQ:MPWR)

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Outperform 75 (OpenAI - 5.2)

Rating:75Outperform

Price Target:

$1,265.00

▲(9.43% Upside)

Monolithic Power's overall stock score reflects its strong financial performance and strategic market positioning, particularly in automotive and enterprise data. While technical indicators and valuation suggest moderate growth potential, the company's robust earnings and dividend policy support a positive outlook.

Positive Factors

Balance Sheet Strength

Extremely low leverage and an 84.81% equity ratio provide durable financial flexibility. High ROE (56.64%) and minimal debt reduce bankruptcy risk, support sustained R&D and capital allocation, and allow the firm to fund growth or shareholder returns through cycles.

High Margins and Cash Conversion

Sustained high margins and strong cash conversion (free cash flow to net income ~78.3%, OCF/net income ~2.03) indicate durable pricing power and operational efficiency. This underpins reinvestment capacity, consistent R&D funding, and long-term ability to sustain shareholder returns.

Diversified End-Market Exposure and Design Wins

Broadening adoption across automotive, enterprise data, industrial and new robotics BMS wins reduces end-market cyclicality. Multiple vertical design wins and layering of customers create stickier relationships and recurring revenue drivers that support steadier long-term growth.

Negative Factors

Gross Margin Stability Concerns

A trend of declining gross margins and only mid-50s guidance signals potential structural headwinds from product mix, competitive pricing, or execution. Persistent margin pressure would reduce free cash flow and limit ability to fund long-term initiatives or expand investment without sacrificing returns.

Limited Visibility Into Near-Term Demand

Weak backlog visibility hampers capacity planning, inventory and procurement decisions, and margin management. Structural uncertainty in demand makes long-term forecasting and capital allocation harder, potentially increasing volatility in operating leverage and execution over coming quarters.

Underperformance in AI Market Engagement

Reluctance or limited traction in the AI segment risks missing a large secular growth opportunity in semiconductors. Persistent underengagement could constrain TAM expansion, concentrate revenue in other segments, and leave MPS exposed if AI-driven demand becomes a dominant industry driver.

Monolithic Power (MPWR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$54.46B

Dividend Yield0.62%

Average Volume (3M)487.81K

Price to Earnings (P/E)29.7

Beta (1Y)2.09

Revenue Growth30.48%

EPS Growth339.29%

CountryUS

Employees4,017

SectorTechnology

Sector Strength88

IndustrySemiconductors

Share Statistics

EPS (TTM)4.79

Shares Outstanding47,907,000

10 Day Avg. Volume660,269

30 Day Avg. Volume487,807

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)9.14

Price to Sales (P/S)13.03

P/FCF Ratio44.77

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue20.41

Enterprise Value/Gross Profit36.95

Enterprise Value/Ebitda72.35

Forecast

1Y Price Target

$1,295.00

Price Target Upside12.03% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

EPS Forecast (FY)20.79

Revenue Forecast (FY)$3.25B

Monolithic Power Business Overview & Revenue Model

Company DescriptionMonolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the computing and storage, automotive, industrial, communications, and consumer markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as portable electronic devices, wireless LAN access points, computers and notebooks, monitors, infotainment applications, and medical equipment. It also offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in notebook computers, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors and value-added resellers, as well as directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers in China, Taiwan, Europe, South Korea, Southeast Asia, Japan, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.

How the Company Makes MoneyMonolithic Power generates revenue primarily through the sale of its semiconductor products, which are used in various applications across multiple industries. The company operates on a direct sales model and also collaborates with distributors to reach a broader market. Key revenue streams include the sale of integrated circuits and power modules, with significant contributions from sectors like automotive and industrial automation. Additionally, MPWR benefits from partnerships with major electronics manufacturers, which helps increase its product adoption and market presence. The company's focus on innovation and development of advanced power solutions contributes to its competitive advantage and financial performance.

Monolithic Power Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where Monolithic Power is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsMonolithic Power's revenue from Taiwan and China is surging, driven by robust demand in storage, computing, and automotive sectors, aligning with their record quarterly revenue. However, the U.S. and Europe are experiencing a downturn, potentially due to geopolitical risks and macroeconomic pressures. The company's strategic diversification and innovation efforts are mitigating some risks, but challenges in the enterprise data segment and slight gross margin declines could impact future performance. Investors should watch for developments in these areas as MPS navigates a complex global landscape.

Data provided by:

The Fly

Monolithic Power Earnings Call Summary

Earnings Call Date:Feb 05, 2026

(Q4-2025)

Next Earnings Date:Apr 30, 2026

Earnings Call Sentiment Positive

The call conveyed a predominantly positive operational and financial picture: strong full-year and Q4 revenue growth, robust gains in non-enterprise data and automotive, record module and optical momentum, improved enterprise data ordering and an expanding, geographically balanced capacity base. Management also increased shareholder returns and reiterated long-term gross margin targets. Key risks and lowlights include gross margins sitting near the low end of the target band, macro and memory/PC uncertainties, the potential for backlog volatility driven by customer capacity behavior (double ordering), and that some new-technology revenues may be pushed to later periods. On balance, the weight of record results, diversified growth drivers and improved visibility outweigh the highlighted risks.

Q4-2025 Updates

Positive Updates

Record Annual and Quarterly Revenue

Full-year 2025 revenue of $2.8 billion, up 26.4% year-over-year; Q4 2025 record quarterly revenue of $751.2 million, +20.8% year-over-year and +1.9% sequentially.

Strong Non-Enterprise Data and Automotive Growth

Non-enterprise data end markets grew over 40% year-over-year in 2025; automotive revenue grew ~43% year-over-year driven by new 48-volt and zonal architecture solutions (including first fully integrated 48V e-fuse and a kW-level zonal controller).

Improved Enterprise Data Visibility and Backlog

Management reported a material step-up in ordering patterns with book-to-bill well in excess of 1, backlog extending into Q2 2026, and increased confidence in enterprise data demand (management cited a new conservative 'floor' of ~50% growth for enterprise data based on recent ordering trends).

Module and Optical Transceiver Momentum

Company reported record module revenue and notable ramp in optical transceiver engagement (analyst-modeled at roughly ~5% of sales exiting 2025), with expansion into AI, server, memory, optical modules and switch applications supported by higher current density, efficiency and packaging.

Capacity Expansion and Supply-Chain Diversification

Secured more than $4 billion of geographically balanced capacity and continues to add supply chain partners; management emphasized active supply-chain management across silicon, compound devices, module components and quality/audit processes to support future growth.

Shareholder Returns and Cash Deployment

Quarterly dividend increased 28% to $2.00 per share; company returned over 72% of free cash flow to stockholders via share repurchases and dividends over the three years ending December 2025.

Technology Sampling and Product Roadmap

Sampling of 800-volt data-center power solutions underway (first to sample per management) and progress on higher current-density packaging (sampling planned/underway), positioning the company for future systems-level revenue and migration from silicon to module/system solutions.

Gross Margin Targeting and Margin Progress

Corporate gross margin target reiterated at 55-60%; management reported current trending near the low end (~55.5-55.8%) and expects the potential for incremental sequential margin improvement (citing potential 10-20 bps quarterly cadence if backlog and demand hold).

Negative Updates

Enterprise Data Prior-Year Weakness and Uncertainty

While management is more confident heading into 2026, enterprise data had been down earlier (management noted enterprise data was historically the largest end market and had declined ~2% in 2025) and visibility can still be volatile depending on customer ordering and capacity dynamics.

Gross Margin Currently at Low End of Target

Although the 55-60% gross margin target remains, the company is currently at the lower portion of that band (~55.5-55.8%), indicating limited near-term margin upside until backlog and demand provide sustained leverage.

Macro, Market and Timing Risks

Management flagged macro uncertainties (tariffs, potential end of EV subsidies, memory shortages) that could affect the shape of the year and made clear they are hesitant to provide firm full-year segmentation guidance; some anticipated technology revenue (e.g., certain GaN/SiC solutions) was not expected to be meaningful within the immediate year.

Capacity-Related Customer Behavior and Volatility Risk

Customers' concerns about industry-wide capacity constraints could lead to double ordering to secure capacity; while MPS said it has balanced capacity, this dynamic creates backlog volatility and potential demand normalization risks if some orders are temporary.

Timing of New Technology Revenue Realization

Management noted sampling of advanced solutions (800V, GaN/SiC and higher-density packaging) but indicated meaningful revenue from some of these technologies may not materialize until later periods (e.g., not necessarily in the current year).

PC/Memory Market Uncertainty

Analysts and management discussed potential memory price/availability issues and uncertain PC demand; company participation in PC-related markets is selective, and the direction of those markets could create headwinds if they weaken.

Company Guidance

The company raised its confidence in 2026 demand—driven largely by enterprise data—saying Q4 2025 produced a record $751.2M (up 1.9% sequentially, +20.8% YoY) and FY2025 revenue hit $2.8B (+26.4% YoY), with non-enterprise data up >40% and automotive +43% in 2025; order trends showed book-to-bill well above 1, backlog extending into Q2 2026, and channel inventory at the low end of the range. Management said it can at minimum raise its prior enterprise-data outlook into a floor of ~50% growth (vs. a prior 30–40% range), highlighted secured geographically balanced capacity in excess of $4B, ongoing module sampling (including 800V solutions) and packaging/current-density milestones, and reiterated a corporate gross-margin target of 55–60% (recently ~55.5–55.8% with expected incremental 10–20 bps q/q improvement). They also announced a 28% increase to a $2.00 quarterly dividend, noted >72% of free cash flow returned to shareholders over the past three years, and cautioned that macro and supply variables (tariffs, subsidies, memory market) mean they remain conservative on full-year pacing.

Monolithic Power Financial Statement Overview

Summary

Monolithic Power demonstrates strong financial health with impressive profitability, a solid balance sheet, and robust cash flow generation. The company has high margins and a strong return on equity, although revenue growth has moderated.

Income Statement

Very Positive

Monolithic Power exhibits strong financial performance with consistent revenue growth and robust profitability metrics. The TTM gross profit margin is healthy at 55.24%, and the net profit margin is exceptionally high at 71.22%, indicating efficient cost management and strong pricing power. The EBIT and EBITDA margins are also solid at 26.01% and 26.77%, respectively. The revenue growth rate of 4.60% in the TTM period shows a positive trajectory, although it has slowed compared to previous years.

Balance Sheet

Positive

The company's balance sheet is strong, with a very low debt-to-equity ratio, effectively zero in the TTM period, highlighting minimal leverage and financial risk. The return on equity is impressive at 56.64%, reflecting efficient use of shareholder funds to generate profits. The equity ratio stands at 84.81%, indicating a solid capital structure with a high proportion of equity financing.

Cash Flow

Positive

Monolithic Power's cash flow performance is robust, with a free cash flow growth rate of 12.3% in the TTM period, indicating effective cash generation. The operating cash flow to net income ratio is strong at 2.03, suggesting healthy cash conversion. The free cash flow to net income ratio of 78.27% further underscores the company's ability to generate cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.66B	2.21B	1.82B	1.79B	1.21B	844.45M
Gross Profit	1.47B	1.22B	1.02B	1.05B	685.46M	465.95M
EBITDA	750.71M	575.79M	521.90M	563.90M	291.12M	185.87M
Net Income	1.90B	1.79B	427.37M	437.67M	242.02M	164.38M
Balance Sheet
Total Assets	4.21B	3.62B	2.43B	2.06B	1.59B	1.21B
Cash, Cash Equivalents and Short-Term Investments	1.27B	862.95M	1.11B	737.87M	725.08M	595.11M
Total Debt	15.08M	15.79M	5.57M	1.66M	0.00	3.10M
Total Liabilities	638.45M	471.33M	384.41M	390.28M	341.84M	241.90M
Stockholders Equity	3.57B	3.15B	2.05B	1.67B	1.24B	966.59M
Cash Flow
Free Cash Flow	705.17M	642.29M	580.63M	187.83M	224.77M	212.16M
Operating Cash Flow	900.97M	788.41M	638.21M	246.67M	320.01M	267.80M
Investing Cash Flow	373.46M	223.05M	-178.73M	-12.51M	-378.89M	-39.18M
Financing Cash Flow	-893.94M	-872.23M	-183.72M	-128.78M	-90.21M	-71.56M

Monolithic Power Technical Analysis

Technical Analysis Sentiment

Positive

Last Price1155.99

Price Trends

50DMA

995.10

Positive

100DMA

975.86

Positive

200DMA

853.61

Positive

Market Momentum

MACD

51.93

Negative

RSI

65.07

Neutral

STOCH

61.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MPWR, the sentiment is Positive. The current price of 1155.99 is above the 20-day moving average (MA) of 1070.41, above the 50-day MA of 995.10, and above the 200-day MA of 853.61, indicating a bullish trend. The MACD of 51.93 indicates Negative momentum. The RSI at 65.07 is Neutral, neither overbought nor oversold. The STOCH value of 61.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MPWR.

Monolithic Power Risk Analysis

Monolithic Power disclosed 36 risk factors in its most recent earnings report. Monolithic Power reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Monolithic Power Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRVL	76 Outperform	$62.53B	25.82	18.04%	0.28%	44.95%	―
MPWR	75 Outperform	$54.46B	29.74	64.03%	0.62%	30.48%	339.29%
ON	73 Outperform	$24.97B	82.34	3.87%	―	-16.13%	-81.06%
NXPI	69 Neutral	$57.09B	28.37	21.01%	1.79%	-6.81%	-23.16%
STM	64 Neutral	$25.59B	153.88	0.93%	1.28%	-17.33%	-76.71%
MCHP	62 Neutral	$42.28B	-172.81	-2.85%	2.79%	-23.36%	-131.15%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

MPWR

Monolithic Power

1,155.99

499.42

76.07%

MRVL

Marvell

74.21

-44.63

-37.56%

MCHP

Microchip

78.04

26.56

51.58%

NXPI

NXP Semiconductors

222.13

9.31

4.37%

ON Semiconductor

63.10

10.66

20.33%

STM

STMicroelectronics

28.98

6.48

28.80%

Monolithic Power Corporate Events

Dividends

Monolithic Power Announces Q4 Dividend for Shareholders

Positive

Dec 12, 2025

On December 12, 2025, Monolithic Power Systems announced a fourth-quarter cash dividend of $1.56 per share, payable to stockholders of record as of December 31, 2025, with payment scheduled for January 15, 2026. This announcement reflects the company’s ongoing commitment to providing consistent returns to its shareholders, reinforcing its position in the semiconductor power electronics industry.

The most recent analyst rating on (MPWR) stock is a Buy with a $1102.00 price target. To see the full list of analyst forecasts on Monolithic Power stock, see the MPWR Stock Forecast page.

Business Operations and StrategyShareholder Meetings

Monolithic Power Lowers Threshold for Special Meetings

Neutral

Nov 21, 2025

On November 19, 2025, Monolithic Power Systems, Inc. announced the adoption of its Amended and Restated Bylaws, which lower the ownership threshold for stockholders to call a special meeting from 30% to 25%. This decision follows the 2025 annual meeting where a non-binding proposal for a 10% threshold was approved, and feedback from major stockholders supported a higher threshold than 10%. The board’s decision reflects the company’s response to stockholder input and peer company practices.

The most recent analyst rating on (MPWR) stock is a Buy with a $991.00 price target. To see the full list of analyst forecasts on Monolithic Power stock, see the MPWR Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 20, 2025