Important points
Monolithic Power Systems (MPWR) stock has fallen more than 30% since the semiconductor company’s last earnings report at the end of October, after hitting a record high last year, but analysts remain optimistic about the stock. He maintains a bullish stance.
In a note earlier this week, Deutsche Bank analysts added Monolithic to their list of “top priority stocks,” calling the recent decline in the stock a “buying opportunity.” Analysts reiterated their buy rating and $900 price target, saying sales growth and improving margins over the next two years could be positive catalysts.
Outlook for Q4 is moderate, stock price falls due to potential decline in NVIDIA sales
Monolithic beat third-quarter profit estimates, but the company’s outlook for “nearly flat” sales growth in the fourth quarter shocked investors, sending the company’s stock price 17% in one day. It plummeted.
The stock took another hit in November when it was reported that Nvidia (NVDA) was considering reducing the amount of components it buys from Monolithic for its Blackwell platform. Analysts had previously cited Blackwell as a positive for Monolithic stock.
Expanding AI market, “diversity of growth drivers” may support monolithic
Deutsche Bank analysts say that even if Monolithic loses share among Nvidia’s suppliers, the company should “continue to see strong AI growth” as the market of potential customers continues to expand. It is written.
Analysts say that while the company’s valuation is “at the high end of our comfort range,” they value Monolith’s “consistent execution, above-industry growth, diverse growth drivers, and potential for sustainable earnings growth.” Said to be justified by reason.
Ten of the 11 analysts tracked by Visible Alpha rate the hardware maker’s stock a “buy,” while one rates it a “hold.” The average price target of $822.91 is more than 30% above Friday’s closing price of $625.82, suggesting analysts believe the stock will regain most of the value it lost since its third-quarter report. There is.
Monolithic is scheduled to release its fourth quarter earnings report after the bell on February 6th.
