Power Integrations (POWI) AI Stock Analysis

• Market Cap: $2.33B
• Dividend Yield: 2.27%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 134.1
• Beta (1Y): 1.61
• Revenue Growth: 10.50%
• EPS Growth: -52.00%
• Country: US
• Employees: 865
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.36
• Shares Outstanding: 55,336,163
• 10 Day Avg. Volume: 776,403
• 30 Day Avg. Volume: 1,092,359
• PEG Ratio: -2.64
• Price to Book (P/B): 4.68
• Price to Sales (P/S): 8.37
• P/FCF Ratio: 54.87
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 4.49
• Enterprise Value/Gross Profit: 8.19
• Enterprise Value/Ebitda: 53.73
• 1Y Price Target: $51.75
• Price Target Upside: 19.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.34
• Revenue Forecast (FY): $477.01M

• Rating: 62 Neutral
• Price Target: $45.00 ▲(3.50% Upside)

The score is primarily supported by POWI’s very strong, debt-free balance sheet and ongoing cash generation. It is held back by currently compressed profitability, expensive valuation (very high P/E), and a mixed near-term outlook from guidance (sequential revenue decline, consumer softness, and inventory/gross-margin headwinds), partially offset by industrial growth and strategic opportunities such as the NVIDIA data-center collaboration.

Positive Factors

Strong Balance Sheet

A debt-free balance sheet enhances financial stability and provides flexibility for future investments, supporting long-term growth.

Industrial Sector Growth

Strong growth in the industrial sector indicates successful penetration in high-demand markets, supporting sustained revenue expansion.

Collaboration with NVIDIA

Partnership with NVIDIA on advanced power solutions positions the company well in the growing AI and data center markets.

Negative Factors

Declining Revenue

A significant revenue decline reflects market challenges and could hinder the company's ability to invest in growth opportunities.

Consumer Segment Slowdown

A sharp decline in consumer segment orders indicates potential ongoing weakness, impacting overall revenue and market position.

Gross Margin Decline

Decreasing gross margins due to higher costs and unfavorable exchange rates could pressure profitability and limit competitive pricing.

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

Power Integrations exhibits a strong balance sheet with no debt and high equity levels, which is a positive indicator of financial health. However, the decline in revenue and profitability across recent years poses challenges for their income statement. Cash flow remains solid, particularly in operational cash generation, but negative free cash flow growth could limit expansion opportunities. Overall, the company maintains financial stability but faces headwinds in revenue growth and profitability.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	445.55M	418.97M	444.54M	651.14M	703.28M	488.32M
Gross Profit	244.31M	224.75M	228.96M	366.91M	360.64M	243.59M
EBITDA	37.26M	52.51M	72.44M	217.76M	210.01M	98.59M
Net Income	17.94M	32.23M	55.73M	170.85M	164.41M	71.18M
Balance Sheet
Total Assets	772.53M	828.83M	819.87M	840.10M	1.01B	903.34M
Cash, Cash Equivalents and Short-Term Investments	241.86M	300.00M	311.57M	353.81M	530.35M	449.19M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	100.55M	79.05M	67.63M	84.88M	102.45M	92.93M
Stockholders Equity	671.98M	749.77M	752.24M	755.22M	912.03M	810.41M
Cash Flow
Free Cash Flow	79.65M	63.90M	44.88M	176.13M	183.60M	55.04M
Operating Cash Flow	100.04M	81.18M	65.76M	215.34M	230.87M	125.64M
Investing Cash Flow	32.30M	-25.92M	-14.15M	78.34M	-232.80M	-28.27M
Financing Cash Flow	-142.16M	-68.22M	-93.05M	-346.42M	-98.83M	-17.19M

Power Integrations Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 43.48 is above the 20-day moving average (MA) of 38.52, above the 50-day MA of 36.44, and below the 200-day MA of 45.10, indicating a neutral trend. The MACD of 1.58 indicates Negative momentum. The RSI at 75.54 is Negative, neither overbought nor oversold. The STOCH value of 90.09 is Negative, 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	78 Outperform	$2.86B	22.81	13.62%	―	-20.69%	-37.67%
SIMO	76 Outperform	$3.80B	38.45	11.88%	2.22%	-2.26%	9.74%
DIOD	70 Outperform	$2.59B	41.60	3.47%	―	10.45%	4.37%
FORM	68 Neutral	$5.58B	137.07	4.16%	―	2.29%	-69.81%
POWI	62 Neutral	$2.33B	134.12	2.53%	2.27%	10.50%	-52.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYNA	60 Neutral	$3.57B	-77.62	-3.16%	―	13.24%	-129.14%

Power Integrations Corporate Events

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.