Stock analysis/Share presentation ⬇️
Today we are talking about the company Monolithic Power Systems (MPS): $MPWR (-5.91%)
What is and does MPS anyway: 🤔
Monolithic Power Systems specializes in the design, manufacture and marketing of high-performance, semiconductor-based power electronics solutions. The group's products include power modules, power management solutions (power converters, regulators, voltage monitoring systems, integrated circuits, power over Ethernet, gate drivers, controllers, USB power systems, power distribution systems, etc.), AC/DC converters, analog components, sensors, inductors, and battery management solutions.
How are net sales distributed at MPS:
Net sales are distributed among the individual markets as follows:
- IT and data storage (30.8%): Components and equipment for storage networks, computers, printers, servers and workstations
- Consumer electronics (23.4%): Components for set-top boxes, monitors, game consoles, lighting systems, chargers, home appliances, cell phones, wearables, GPS, televisions, stereos and camera
- Automotive (16.9%): Solutions for infotainment applications and advanced driver assistance and connectivity systems
- Industrial (15.3%): Solutions for power generators, security systems, point-of-sale systems, smart meters and other industrial equipment
- Telecommunications (13.6%): Components and equipment for network and telecommunications infrastructures, routers, modems and wireless applications
Net sales are distributed among these countries:
At the end of 2021, the Group had three production sites in China.
Net sales are distributed geographically as follows: United States (3%), China (58%), Taiwan (14%), South Korea (7.7%), Europe (7.1%), Japan (5.7%) and Southeast Asia (4.5%).
When was MPS founded? 🤔
In November 1997, Michael R. Hsing and James C. Moyer founded Monolithic Power Systems, with the vision of monolithically building an entire power system on a single chip. This should result in significantly improved system performance while reducing design effort.
How many employees does the company have: 🙋🏽♂️🙋🏻♀️
Currently, MPS has a total of over 3,300 employees.
P/E RATIO:
MPS has a current P/E ratio of just under 52, which is currently very high in my opinion.
Market capitalization: 🏦
Currently, MPS has a market capitalization of around 20.5 billion euros.
Dividend yield: 💰
The company pays its shareholders a dividend of currently over 0.85%. This distribution is made on a quarterly basis. MPS shareholders receive their dividends in January, April, July and October.
Strengths of the share: 📈
- The company is quite diversified and has a presence all over the world
- The company pays its shareholders a dividend yield of almost 1%.
- The estimates of various analysts on the development of business activity are relatively similar. This results from good predictability associated with the company's business activity and/or excellent communication from the company to analysts.
- The Group's business area contains high growth potential. According to MPS, the company's growth is expected to be strong at 56% in 2025.
Weaknesses of the share: 📉
- The company is relatively expensively valued with a P/E ratio of currently just under 52.
- Revisions to sales expectations for the past year are trending significantly downward. Sales forecasts have been regularly revised downward by analysts.
- The valuation level of the company is particularly high given the cash flow generated.
More about the MPS business model: ⬇️
Monolithic Power Systems is a semiconductor company that designs, develops and markets power solutions. In doing so, the company specializes in semiconductor components called integrated circuits ("ICs"). Monolithic Power System's modules are used to convert and control voltages within electronic systems.
The company is active in the following segments.
Computers and Memory: The segment is about manufacturing and selling power solutions that ensure servers and data centers are able to deliver at higher rates. In this age of cloud computing, artificial intelligence and machine learning, powerful yet energy-efficient servers and data centers are in huge demand. Here, Monolithic Power Systems can offer solutions to its customers with a wide range of products.
But laptops and tablets also fall into this area. Here the company has products for economical but powerful power supply in its portfolio. In addition to all the processing of data, the company also offers solutions for secure data storage.
Automotive: This area includes all semiconductor components installed in cars, whether comfort electronics, engine control or battery management systems. Today's cars are computers on wheels. Over 1000 chips are installed in new cars. Due to the trends of e-mobility and autonomous driving, the chip count will continue to increase. Here Monolithic Power Systems supplies various products in all areas.
Industry: This area is about various applications from the industrial sector. These include power tools for everyday use, sewing machines in large factory applications, unmanned aerial vehicles and mobile data terminals used for remote access and transmission of data over a network.
Telecommunications: Here, the company sells solutions that include power modules, power converters, controllers and regulators for building high-speed data and network connections. In this area, Monolithic Power Systems can benefit from the future trend of 5G.
Products for everyday use: This segment is about electronic products for private use. These include, for example, smartphones, tablets, televisions, headphones and drones. The company offers various products for all these electronic devices.
How does the stock look chart-wise? (US dollars converted into euros) 📈📉
Currently, the share is just under 430.00€. At the beginning of 2023, the share hit a high of just under €477. This was approached exactly twice and then sold off. Thereupon, it went to the first support zone at 440€. Unfortunately, this did not hold and is now a very important resistance. The next support zone, which is currently extremely important, is at 420€. The share has bounced off this zone several times. And has approached the resistance at 440€. Now it is important to get back above the resistance. If this support zone does not hold, the next support zone at just under 367€ is waiting below.
Target of MPS: 🎯🏁
Monolithic Power Systems has a mission to reduce energy and material consumption and thus improve all aspects of quality of life. To achieve this, the company aims to provide the most user-friendly power supply solutions possible. On the one hand, the focus is on developing innovative products, but on the other hand, it must also be ensured that these are easy for customers to understand and use.
Your opinion: 🤔🧐
Now I'd love to hear your opinion on this stock in the comments.
What do you think of MPS and did you already know this company?
Do you guys maybe already have this stock in your portfolio?
Feel free to let me know in the comments.
Of course, this is not an investment advice but just my own opinion that I would like to share with you.
