MPWR - Embedded Expectations Analysis - 2021 04 06
Monolithic Power Systems, Inc. (MPWR:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with an 81.9x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about industrial revenue growth, their ability to meet increasing demand, and fab capacity expansionSpecifically, management may lack confidence in their ability to sustain industrial revenue growth, meet rising demand, and manage litigation expenses. Furthermore, they may have concerns about the sustainability of their module sales, and they may lack confidence in their ability to further reduce their day sales outstanding. Moreover, management may lack confidence in their ability to expand fab capacity outside of China, attract new customers to their MPS NOW service, and address their supply chain delinquencies. They may also be overstating the potential of their capacity growth and infrastructure investments, the sustainability of MPS operating cash flow, and business momentum across automotive and industrial end-markets. Finally, management may be exaggerating their technological capabilities and industry recognition
Monolithic Power Systems is a fabless semiconductor company. The company designs, develops and markets power solutions for systems found in consumer, computing and storage, automotive, industrial, communications and consumer applications. The company's primary product families include the following: Direct Current (DC) to DC products, which are used to convert and control voltages within a range of electronic systems such as portable electronic devices, wireless Local Area Network access points, computers, and monitors, automobiles and medical equipment; and Lighting Control Products, which include lighting control integrated circuits that are used in backlighting and general illumination products.
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