Power Integrations (POWI) AI Stock Analysis

• Market Cap: $2.66B
• Dividend Yield: 2.27%
• Average Volume (3M): 887.36K
• Price to Earnings (P/E): 90.2
• Beta (1Y): 1.56
• Revenue Growth: 10.50%
• EPS Growth: -52.00%
• Country: US
• Employees: 865
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.23
• Shares Outstanding: 55,504,000
• 10 Day Avg. Volume: 797,785
• 30 Day Avg. Volume: 887,361
• PEG Ratio: -2.86
• Price to Book (P/B): 2.96
• Price to Sales (P/S): 4.49
• P/FCF Ratio: 22.87
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 5.71
• Enterprise Value/Gross Profit: 10.49
• Enterprise Value/Ebitda: 58.73
• 1Y Price Target: $52.50
• Price Target Upside: 11.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.33
• Revenue Forecast (FY): $477.00M

• Rating: 64 Neutral
• Price Target: $51.00 ▲(8.58% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

POWI scores moderately: strong balance-sheet quality and resilient cash flow (including significant shareholder returns) plus constructive price momentum are offset by a steep TTM revenue decline/margin compression and a very expensive valuation (P/E ~150). Earnings-call guidance and cost actions help sentiment but inventory and demand/mix risks remain near term.

Positive Factors

Debt-free balance sheet

Zero reported debt and substantial equity provide durable financial flexibility through semiconductor cycles. This lowers solvency risk, enables continued R&D and product investment, supports opportunistic M&A or buybacks, and cushions cash flow volatility over the next 2–6 months.

Strong cash generation & returns

Consistent operating cash flow and sizable free cash flow underpin repeatable capital allocation. Large shareholder returns while funding CapEx/R&D indicate resilient cash conversion that can sustain investment and capital discipline even if revenues remain soft near term.

GaN & industrial product momentum

Rapid PowiGaN adoption and high‑power industrial wins reflect structural exposure to electrification, grid modernization and data‑center power needs. These secular product trends diversify end markets and underpin a durable revenue runway and higher‑margin product mix over the medium term.

Negative Factors

Steep revenue decline & margin squeeze

A sustained ~46% TTM revenue decline and compressed margins materially reduce operating leverage and ROE. If demand recovery is slow, profitability and reinvestment capacity remain constrained, limiting the company's ability to expand SG&A/R&D or scale new products in the 2–6 month horizon.

Elevated inventory/working capital

Very high inventory days and channel build create cash tied up in working capital and increase risk of markdowns or shipment delays. This weakens cash conversion durability, makes quarterly revenue lumpy, and may pressure margins if excess inventory must be discounted.

Delayed realization in automotive/data center

While pipeline opportunities exist, extended timelines for automotive and data‑center revenue mean material scale and margin benefits are backloaded. Management must execute over many quarters, exposing results to adoption, supply and competitive risks before these markets meaningfully offset current headwinds.

Power Integrations Business Overview & Revenue Model

Company Description

Power 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 Money

Power Integrations generates revenue primarily through the sale of its semiconductor products, which include integrated circuits used in power supplies for a variety of applications such as consumer electronics, LED lighting, and industrial equipment. The company operates a direct sales model and also works with a network of distributors and manufacturers' representatives to reach a broader customer base. Key revenue streams include product sales, royalties from licensing its technologies, and design wins in new applications. Partnerships with major manufacturers in the electronics and renewable energy sectors further enhance its market reach and contribute to its earnings through collaborative development and innovation initiatives.

Power Integrations Financial Statement Overview

Summary

Financials are mixed: a very strong, debt-free balance sheet (Balance Sheet Score 86) and solid cash generation (Cash Flow Score 72; $112M operating cash flow and $87M free cash flow TTM) offset weak operating results (Income Statement Score 44) marked by a sharp TTM revenue decline (-45.9%) and compressed margins (net margin ~4%, EBIT margin ~1.8%).

Income Statement

TTM (Trailing-Twelve-Months) revenue is down sharply (-45.9%), extending a multi-year downcycle after the 2021–2022 peak. Profitability has compressed meaningfully: net margin is ~4.0% TTM versus ~7.7% in 2024 and much higher levels in 2021–2022, with EBIT margin also low (~1.8%) despite still-healthy gross margin (~54.8%). Strengths are sustained positive earnings and solid gross profitability, but the main weakness is the steep demand/volume decline and margin erosion through the cycle.

Balance Sheet

The balance sheet is a clear strength: the company reports zero debt across periods, with substantial equity ($673M TTM) funding the asset base ($772M TTM). This provides strong financial flexibility and lowers solvency risk in a volatile semiconductor cycle. The key weakness is reduced profitability on that equity (ROE ~2.5% TTM, down from ~4.3% in 2024 and higher in prior years), reflecting the earnings downturn rather than leverage.

Cash Flow

Cash generation remains solid despite weaker earnings. TTM operating cash flow is strong ($112M) and supports healthy free cash flow ($87M), with free cash flow up sharply versus the prior period (growth ~9.385). Operating cash flow exceeds net income (coverage ~1.41x), indicating good cash conversion and resilience. The main watch-out is that free cash flow relative to net income (~0.80x) is good but not exceptional, and cash flow strength may be helped by cyclical working-capital dynamics during a downturn.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	443.50M	418.97M	444.54M	651.14M	703.28M
Gross Profit	241.65M	224.75M	228.96M	366.91M	360.64M
EBITDA	49.01M	52.51M	72.44M	217.76M	210.01M
Net Income	22.09M	32.23M	55.73M	170.85M	164.41M
Balance Sheet
Total Assets	772.21M	828.83M	819.87M	840.10M	1.01B
Cash, Cash Equivalents and Short-Term Investments	249.51M	300.00M	311.57M	353.81M	530.35M
Total Debt	0.00	28.19M	17.33M	14.56M	19.79M
Total Liabilities	99.36M	79.05M	67.63M	84.88M	102.45M
Stockholders Equity	672.85M	749.77M	752.24M	755.22M	912.03M
Cash Flow
Free Cash Flow	87.12M	63.90M	44.88M	176.13M	183.60M
Operating Cash Flow	111.52M	81.18M	65.76M	215.34M	230.87M
Investing Cash Flow	36.21M	-25.92M	-14.15M	78.34M	-232.80M
Financing Cash Flow	-139.94M	-68.22M	-93.05M	-346.42M	-98.83M

Power Integrations Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POWI, the sentiment is Positive. The current price of 46.97 is above the 20-day moving average (MA) of 46.89, above the 50-day MA of 43.48, and above the 200-day MA of 44.62, indicating a bullish trend. The MACD of 1.19 indicates Positive momentum. The RSI at 53.36 is Neutral, neither overbought nor oversold. The STOCH value of 58.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for POWI.

Power Integrations Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	74 Outperform	$2.66B	21.10	11.74%	―	-20.69%	-37.67%
DIOD	73 Outperform	$3.06B	34.57	3.60%	―	10.45%	4.37%
FORM	73 Outperform	$7.23B	82.61	5.48%	―	2.29%	-69.81%
SIMO	73 Outperform	$4.06B	4.07	15.25%	2.22%	-2.26%	9.74%
POWI	64 Neutral	$2.66B	90.19	3.11%	2.27%	10.50%	-52.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYNA	61 Neutral	$2.98B	-48.27	-4.49%	―	13.24%	-129.14%

Power Integrations Corporate Events

Power Integrations Announces Leadership Changes and Profit Recovery

On February 2, 2026, Power Integrations’ board approved a new indemnification agreement for directors and officers, expanding protections and expense advancements for individuals acting in good faith while serving the company, without limiting their other indemnification rights. The company also initiated a restructuring on February 1, 2026, cutting about 7 percent of its global workforce as of February 2 to reduce costs and improve efficiency, a move expected to generate $3.5 million to $4.0 million in severance and benefits charges in the first quarter of 2026, and on February 5 announced governance changes with longtime chairman Balu Balakrishnan stepping down from that role, remaining on the board while independent director Balakrishnan S. Iyer assumes the chairmanship. Reporting results on February 5, 2026 for the quarter and year ended December 31, 2025, the company posted fourth-quarter revenue of $103.2 million, down sequentially and year-on-year but returning to profitability with GAAP net income of $13.3 million, while full-year revenue rose 6 percent to $443.5 million and non-GAAP earnings improved, driven by 15 percent growth in industrial sales and more than 40 percent growth in PowiGaN products; management framed the restructuring and expense alignment as positioning the business to capitalize on expanding demand tied to AI data centers, electrification and grid modernization.

The most recent analyst rating on (POWI) stock is a Buy with a $52.00 price target. To see the full list of analyst forecasts on Power Integrations stock, see the POWI Stock Forecast page.

Power Integrations Expands Inducement Plan and Updates Bylaws

On January 27, 2026, Power Integrations’ Talent and Compensation Committee amended and restated the company’s 2025 Inducement Award Plan, increasing the pool of shares reserved for equity awards by 500,000 to a total of 850,000 shares of common stock. Adopted under Nasdaq’s inducement grant rules, the expanded plan is targeted at new hires or those rejoining after a bona fide break in service, reinforcing the company’s ability to use restricted stock, performance units and other equity incentives to recruit and retain key personnel without seeking immediate shareholder approval. On the same date, the board approved extensive amendments to the company’s bylaws to tighten and clarify procedures for shareholder nominations and proposals, align meeting mechanics with Delaware corporate law, formalize Delaware Chancery Court and U.S. federal courts as exclusive forums for specified disputes, and modernize indemnification and governance provisions. These bylaw changes position Power Integrations more in line with prevailing public-company governance practices, potentially reducing litigation uncertainty while setting clearer expectations for shareholder activism and director elections.

The most recent analyst rating on (POWI) stock is a Hold with a $46.00 price target. To see the full list of analyst forecasts on Power Integrations stock, see the POWI Stock Forecast page.

Power Integrations Appoints Nancy Erba as CFO

Power Integrations has announced the appointment of Nancy Erba as its new Chief Financial Officer, effective January 5, 2026. With over 25 years of experience in corporate finance, including roles at Infinera Corporation and Immersion Corporation, Ms. Erba is expected to enhance the company’s strategic focus and growth in the high-voltage semiconductor market, driven by increasing demands in AI, electrification, and decarbonization.

The most recent analyst rating on (POWI) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Power Integrations stock, see the POWI Stock Forecast page.