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Power Integrations (POWI)
NASDAQ:POWI
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Power Integrations
(NASDAQ:POWI)
Rating:55Neutral
Price Target:―
Positive Factors
Strong Balance Sheet
A debt-free balance sheet with high equity provides financial resilience and flexibility, allowing the company to invest in growth opportunities without the burden of interest obligations.
Growth in Key Segments
Strong growth in consumer, computer, and industrial segments indicates robust demand and effective market positioning, which can drive future revenue and profitability.
GaN Technology Adoption
The adoption of GaN technology positions the company as a leader in advanced semiconductor solutions, potentially capturing significant market share in high-growth applications.
Negative Factors
Revenue Decline
A significant revenue decline indicates challenges in maintaining market share and demand, which could impact long-term growth prospects and profitability.
Inventory Management Issues
High inventory levels suggest inefficiencies in supply chain management, potentially leading to increased costs and reduced cash flow, impacting operational efficiency.
Profitability Challenges
A declining net profit margin reflects reduced profitability, which may constrain reinvestment in business operations and affect long-term financial health.
Power Integrations (POWI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.50B
Dividend Yield1.89%
Average Volume (3M)654.62K
Price to Earnings (P/E)75.5
Beta (1Y)1.49
Revenue Growth7.16%
EPS Growth-21.24%
CountryUS
Employees865
SectorTechnology
Sector Strength87
IndustrySemiconductors
Share Statistics
EPS (TTM)0.35
Shares Outstanding56,095,580
10 Day Avg. Volume503,502
30 Day Avg. Volume654,623
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue6.52
Enterprise Value/Gross Profit11.88
Enterprise Value/Ebitda66.30
Forecast
1Y Price Target
$62.25Price Target Upside39.95% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Power Integrations Business Overview & Revenue Model
Company DescriptionPower Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide. The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems. It also offers high-voltage diodes; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles. In addition, the company provides motor-driver ICs for use in refrigerator compressors, ceiling fans, and air purifiers, as well as pumps, fans, and blowers used in consumer appliances, such as dishwashers and laundry machines. It serves communications, computer, consumer, and industrial markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales force, as well as a network of independent sales representatives and distributors. Power Integrations, Inc. was incorporated in 1988 and is headquartered in San Jose, California.
How the Company Makes MoneyPower Integrations generates revenue primarily through the sale of its proprietary integrated circuits and related components, which are essential in various power conversion applications. The company's key revenue streams include the consumer electronics sector, where its products are used in devices such as smartphones, appliances, and LED lighting. Additionally, the industrial sector contributes significantly to its earnings, with applications in motor controls and power supplies. Power Integrations also benefits from strategic partnerships with electronics manufacturers and technology firms that integrate its solutions into their products, thereby expanding its market reach and driving sales growth. Innovative product development and a strong patent portfolio further reinforce its competitive edge and financial performance.
Power Integrations Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. The company achieved significant growth in industrial and GaN product revenues and made strategic advancements in high-power and automotive segments. However, these positive developments are tempered by consumer segment challenges, a decline in bookings, and tariff-related uncertainties impacting short-term visibility.Q2-2025 Updates
Positive Updates
Revenues and Earnings Growth
Revenues for Q2 were up 9% year-over-year to $116 million, with non-GAAP EPS of $0.35. Cash generated from operations was $29 million.
Industrial Segment Strength
Industrial sales rose nearly 30% from the prior quarter, driven by metering, home and building automation, and growth in solar energy and high-voltage DC transmission.
GaN Product Revenue Surge
Revenues from GaN products increased by more than 50% for the first half of the year, indicating strong demand across various applications like notebooks, TVs, and gaming.
Design Wins in Automotive
Power Integrations secured design wins for automotive applications, with products in about 30 cars globally, expecting material revenue contributions by 2026.
High-Power Segment Growth
High-power revenues grew more than 40% in the first half of 2025, with significant design wins including a traction inverter for a U.S. heavy equipment manufacturer.
Negative Updates
Consumer Segment Headwinds
Consumer revenues were down mid-single digits sequentially due to tariffs and stagnant housing markets, which are impacting the core consumer appliance business.
Decline in Bookings
July bookings were nearly 20% below the normal run rate of prior months, reflecting customer caution around tariffs and affecting short-term revenue visibility.
Legal and Transition Costs
Non-GAAP operating expenses increased due to executive transition costs and litigation expenses, including a $9 million charge for an employment litigation case in California.
Tariff-Related Inventory Adjustments
Major appliances experienced a front-running of tariffs, leading to inventory adjustments and potential demand impact in the second half of the year.
Company Guidance
During the Q2 earnings call for Power Integrations, Inc., the company provided detailed guidance and insights into its financial and operational outlook. The third-quarter revenue is expected to be $118 million, plus or minus $5 million, reflecting strong performance in the industrial sector and GaN products, with a softer outlook in consumer appliances due to tariffs. The company's non-GAAP gross margin is anticipated to be between 55% and 55.5%, slightly down due to higher input costs and currency exchange impacts. Operating expenses are projected to rise to around $47.5 million, driven by legal and R&D costs. The company reported Q2 revenues of $116 million, a 9% year-over-year increase, and $0.35 non-GAAP EPS. Notably, Power Integrations highlighted significant growth in its GaN product revenues, up over 50% in the first half of the year, and outlined strategic initiatives aimed at achieving $1 billion in revenue, focusing on expanding into higher power, higher-value systems such as AI data centers and automotive markets.Power Integrations Financial Statement Overview
Summary
Power Integrations maintains a strong balance sheet with no debt and high equity, indicating solid financial health. However, declining revenue and profitability present significant challenges, as reflected in a reduced net profit margin. Cash flow remains robust, especially in operational cash generation, but negative free cash flow growth could constrain future investments.Income Statement
The income statement shows a decline in total revenue from $651 million in 2022 to $419 million in 2024, indicating a negative revenue growth trend. The gross profit margin for 2024 is approximately 53.6%, which is relatively healthy for the industry. However, the net profit margin dropped from 26.3% in 2022 to 7.7% in 2024, reflecting reduced profitability. EBIT and EBITDA margins also decreased significantly, suggesting operational challenges and reduced earnings efficiency.70
Positive
Balance Sheet
The balance sheet remains strong with a debt-free position in 2024, enhancing financial stability. The equity ratio is high at approximately 90.5%, indicating a solid capital structure with low leverage. Return on equity has declined from 22.6% in 2022 to 4.3% in 2024, highlighting a decrease in shareholder returns. Overall, the company's balance sheet demonstrates financial resilience despite pressures on profitability.80
Positive
Cash Flow
Cash flow metrics indicate a mixed performance. Operating cash flow increased from $65.8 million in 2023 to $81.2 million in 2024, showing improved cash generation from operations. Free cash flow to net income ratio is robust, suggesting effective cash conversion. However, free cash flow growth has been negative when compared to the previous periods, which could impact future investment capabilities. The operating cash flow to net income ratio is strong, indicating efficient cash management despite declining net income.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 442.47M | 418.97M | 444.54M | 651.14M | 703.28M | 488.32M |
| Gross Profit | 242.63M | 224.75M | 228.96M | 366.91M | 360.64M | 243.59M |
| EBITDA | 43.49M | 52.51M | 72.44M | 217.76M | 210.01M | 98.59M |
| Net Income | 33.59M | 32.23M | 55.73M | 170.85M | 164.41M | 71.18M |
Balance Sheet | ||||||
| Total Assets | 797.54M | 828.83M | 819.87M | 840.10M | 1.01B | 903.34M |
| Cash, Cash Equivalents and Short-Term Investments | 268.74M | 300.00M | 311.57M | 353.81M | 530.35M | 449.19M |
| Total Debt | 0.00 | 0.00 | 9.98M | 8.73M | 11.42M | 10.03M |
| Total Liabilities | 93.75M | 79.05M | 67.63M | 84.88M | 102.45M | 92.93M |
| Stockholders Equity | 703.79M | 749.77M | 752.24M | 755.22M | 912.03M | 810.41M |
Cash Flow | ||||||
| Free Cash Flow | 82.67M | 63.90M | 44.88M | 176.13M | 183.60M | 55.04M |
| Operating Cash Flow | 103.10M | 81.18M | 65.76M | 215.34M | 230.87M | 125.64M |
| Investing Cash Flow | 12.17M | -25.92M | -14.15M | 78.34M | -232.80M | -28.27M |
| Financing Cash Flow | -98.83M | -68.22M | -93.05M | -346.42M | -98.83M | -17.19M |
Power Integrations Technical Analysis
Negative
44.48
Price Trends
49.64
Negative
50.95
Negative
54.81
Negative
Market Momentum
-1.20
Negative
40.12
Neutral
44.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POWI, the sentiment is Negative. The current price of 44.48 is below the 20-day moving average (MA) of 45.67, below the 50-day MA of 49.64, and below the 200-day MA of 54.81, indicating a bearish trend. The MACD of -1.20 indicates Negative momentum. The RSI at 40.12 is Neutral, neither overbought nor oversold. The STOCH value of 44.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for POWI.
Power Integrations Risk Analysis
Power Integrations disclosed 27 risk factors in its most recent earnings report. Power Integrations reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Power Integrations Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.62B | 17.03 | 16.19% | ― | -19.38% | -33.03% | |
74 Outperform | $2.47B | 38.72 | 3.49% | ― | 2.86% | -34.32% | |
70 Outperform | $2.84B | 35.23 | 10.16% | 2.23% | -0.29% | 1.47% | |
64 Neutral | $2.73B | 14.47 | -3.34% | ― | 11.98% | -138.59% | |
62 Neutral | $2.27B | 52.32 | 4.53% | ― | 8.30% | -63.69% | |
61 Neutral | $36.58B | 11.16 | -10.43% | 1.86% | 8.71% | -7.09% | |
55 Neutral | $2.50B | 75.53 | 4.68% | 1.89% | 7.16% | -21.24% |
* Technology Sector Average
Performance Comparison
POWI
Power Integrations
45.62
-11.72
-20.44%
ACLS
Axcelis Technologies
83.28
-16.31
-16.38%
DIOD
Diodes
52.53
-7.95
-13.14%
FORM
Formfactor
29.44
-13.37
-31.23%
SIMO
Silicon Motion
89.08
32.96
58.73%
SYNA
Synaptics
69.10
-2.11
-2.96%
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.