Power Integrations (POWI) AI Stock Analysis

• Market Cap: $2.61B
• Dividend Yield: 2.27%
• Average Volume (3M): 773.36K
• Price to Earnings (P/E): 144.1
• Beta (1Y): 1.60
• 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: 55,336,163
• 10 Day Avg. Volume: 895,435
• 30 Day Avg. Volume: 773,358
• 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: 0.98
• Enterprise Value/Revenue: 5.75
• Enterprise Value/Gross Profit: 10.49
• Enterprise Value/Ebitda: 68.80
• 1Y Price Target: $52.50
• Price Target Upside: 11.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $51.00 ▲(7.94% Upside)

The score is primarily supported by a very strong, debt-free balance sheet and solid cash generation, but is held back by currently depressed profitability and an expensive valuation (very high P/E). Technicals are positive but appear overextended, and the latest earnings call signals near-term revenue and margin headwinds despite longer-term industrial and data-center opportunities.

Positive Factors

Debt-free balance sheet

Zero reported debt and substantial equity (~$672M) materially reduce financial leverage risk, giving management durable flexibility to fund R&D, capital expenditures, buybacks and dividends during cycles. This conservatism supports resilience through semiconductor demand variability.

Consistent cash generation & returns

Reliable operating cash flow and planned shareholder returns demonstrate persistent free-cash-flow conversion and disciplined capital allocation. That cash profile sustains dividends, buybacks and funding for product development, underpinning long-term shareholder value even amid revenue cyclicality.

Exposure to industrial electrification and AI DCs

Design wins in industrial electrification and an NVIDIA collaboration point to structural TAM expansion: electrification, grid modernization and AI data‑center power architectures. High-power gate-driver growth (>30%) and industrial growth (~20%) support sustained demand in higher-margin, long-cycle end markets.

Negative Factors

Compressed profitability

Material margin compression reduces return on invested capital and leaves less internal cash to fund innovation or weather downturns. Persistently thin operating margins increase sensitivity to input-cost swings and FX, making long-term earnings power and reinvestment capacity less reliable.

Consumer weakness and guidance cut

A sharp consumer pullback matters because consumer represents a large revenue slice (~34%), so sustained weakness erodes revenue visibility and design-win cadence. Combined with a sequential guidance decline, this raises the risk of prolonged lower sales and distributor destocking pressures.

Volatile cash-flow growth

Although absolute FCF remains positive, a steep decline in FCF growth signals volatile cash conversion versus prior periods. That volatility undermines predictability for capital allocation, raises execution risk for buybacks/dividends, and complicates multi-quarter investment planning.

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

Strong balance sheet strength (debt-free, substantial equity) and still-solid cash generation support resilience, but profitability is currently weak and volatile (thin operating margin and low ROE) despite a sharp recent revenue rebound.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded strongly (+69.7% vs. prior period), and gross margin remains solid at ~54.8%. However, profitability has compressed meaningfully versus prior years: TTM net margin is ~4.0% (down from ~7.7% in 2024 and double-digits in 2021–2023), and operating margin is very thin (~1.8%). Overall, the top-line trajectory has improved recently, but the earnings power has been volatile and currently subdued.

Balance Sheet

The balance sheet is a clear strength: the company reports zero total debt across periods, resulting in essentially no financial leverage risk. Equity remains substantial (~$672M in TTM), supporting a strong capital base. The main offset is weaker recent profitability, with return on equity down to ~2.5% in TTM (vs. ~4.3% in 2024 and much higher in 2021–2022), indicating the company is currently generating lower returns on its capital despite the conservative balance sheet.

Cash Flow

Cash generation remains healthy: TTM operating cash flow is ~$100.0M and free cash flow is ~$79.6M. Cash flow quality is decent, with free cash flow running at ~80% of net income in TTM, and operating cash flow modestly exceeding net income. The key weakness is momentum—TTM free cash flow growth is sharply negative (-366%), signaling a step-down versus the prior period despite the recent revenue rebound.

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: 47.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 47.25 is above the 20-day moving average (MA) of 44.08, above the 50-day MA of 39.25, and above the 200-day MA of 45.12, indicating a bullish trend. The MACD of 2.17 indicates Negative momentum. The RSI at 67.83 is Neutral, neither overbought nor oversold. The STOCH value of 53.46 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
SIMO	73 Outperform	$4.36B	32.95	15.25%	2.22%	-2.26%	9.74%
DIOD	70 Outperform	$2.75B	42.91	3.47%	―	10.45%	4.37%
FORM	70 Outperform	$5.55B	136.27	4.16%	―	2.29%	-69.81%
POWI	68 Neutral	$2.61B	144.12	2.53%	2.27%	10.50%	-52.00%
ACLS	68 Neutral	$2.54B	19.56	13.62%	―	-20.69%	-37.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYNA	60 Neutral	$3.42B	―	-3.16%	―	13.24%	-129.14%

Power Integrations Corporate Events

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.