MPWR - Monolithic stock rises ~10% as Wall Street strikes positive note after Q4 earnings grow

Monolithic Power Systems ( NASDAQ: MPWR ) stock rose ~11% on Thursday after Q4 non-GAAP EPS beat estimates and analysts struck a positive note on the company.

Non-GAAP EPS grew +49.5% Y/Y to $3.17, beating estimates. Revenue increased +36.7% Y/Y to $460.01M, but missed analysts expectations.

Cowen maintained an outperform rating but increased the price target on MPWR to $550 from $490, noting that there are some moving parts in the results but company is showing "remarkable consistency" despite the tough backdrop.

Analyst Matthew Ramsay noted that comments assuring on supplies for global customers should help to ease some concerns, and momentum should pick up in datacenter and auto end-markets in H2 2023, according to Bloomberg.

Monolithic Vice President and CFO Bernie Blegen said during the company's earnings call that, "we continue to diversify our global footprint in the expansion of our R&D centers, supply chain partnerships and facilities outside of China to better match our resource distribution with our customers’ geographic demand profile. With our global presence, we believe MPS is in a strong position to support our customers worldwide."

Meanwhile, KeyBanc, which has an Overweight rating on MPWR raised its price target to $560 from $425 noted that strength in the auto and storage markets helped to offset some weakness in consumer, PC and data end-markets.

Analyst John Vinh added that the firm was encouraged by signs that trading conditions have bottomed out and point to a recovery in H2.

Q4 revenue from Storage and Computing segment grew ~55% Y/Y to $120.84M, while Automotive segment revenue increased +72.8% Y/Y to $97.38M. Revenue from Consumer segment declined ~20% Y/Y to ~$53.02M.

Credit Suisse, which has an Outperform rating, increased price target to $580 from $475 and noted that it is reasonable to have concerns that customers have accumulated inventory last year and that this may weigh on Monolithic. However, Analyst Chris Caso added that Monolithic has found ways to successfully navigate downturns previously and so would not bet against them in this cycle.

Needham also raised its price target on MPWR to $525 from $450, keeping a Buy rating. While, Truist Financial which, has a Buy rating, increased its price target to $608 from $533.

Dividend : The company increased its quarterly dividend by 33.3% to $1.

Outlook :

The company expects Q1 revenue to be between $440M and $460M ( consensus $449.80M).

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