Monolithic Power Systems (NASDAQ: MPWR) Q1 2024 Earnings Beat Estimates, Strong AI Growth

Truist Securities's William Stein raised their price target on Monolithic Power Systems (NASDAQ: MPWR) by 1.3% from $789 to $799 on May 2, 2024. The analyst maintained their Strong Buy rating on the stock.

Monolithic Power Systems, a semiconductor-based power electronics solutions company, reported its Q1 2024 earnings on May 1, 2024. According to Stein, the results represented a "solid upside," and the management provided Q2 guidance "from a position of ongoing strength in AI applications across a still broadening customer base." Stein further elaborated that the company's AI segment is driving the upside, while other end markets are still bottoming, creating a favorable environment for growth in the next one or more years.

For Q1 2024, Monolithic Power Systems reported an EPS of $2.81, beating the Zacks Consensus Estimate of $2.66 but missing Q1 2023's $3.00 by 6.3%. The company's revenue for the quarter stood at $457.9 million, surpassing the Zacks Consensus Estimate of $448 million and showing a 1.5% increase from Q1 2023's $451.1 million. However, the gross margin declined to 55.7% from Q1 2023's 57.7%. Additionally, operating expenses (Opex) rose to $103.4 million compared to Q1 2023's $96 million.

Looking ahead, Monolithic Power Systems' management provided Q2 2024 guidance. They anticipate revenue between $480 million and $500 million, with a gross margin ranging from 55.4% to 56%. The company also expects Opex to be in the range of $106.1 million to $108.1 million. Founder and CEO Michael Hsing expressed caution about business conditions in the second half of 2024 but affirmed the company's long-term growth strategy and ability to adapt to market changes swiftly.

In a recent update on May 2, 2024, Wells Fargo analyst Gary Mobley raised their price target for MPWR by 1.4%, from $715 to $725, while maintaining their Strong Buy rating on the stock.

Currently, all top-rated analysts unanimously rate MPWR as either a Strong Buy or Buy, with no analysts recommending a Hold or a Sell.

Since the release of Monolithic Power Systems' Q1 2024 report on May 1, 2024, the stock price has surged by 9.2%. Comparatively, the stock has seen significant year-over-year growth, rising by 52.3%. During this period, MPWR has outperformed the S&P 500, which has increased by 22.9%.

Truist Securities analyst William Stein, who raised the price target on MPWR, is ranked in the top 1% of Wall Street analysts by WallStreetZen. With an average return of 37.1% and a win rate of 75.2%, Stein specializes in the Technology and Consumer Cyclical sectors.

Monolithic Power Systems, Inc., headquartered in Kirkland, Washington, engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions. The company's products include DC to DC integrated circuits (ICs) used for voltage conversion and control in various electronic systems, as well as lighting control ICs for backlighting in LCD panels and general illumination products. Monolithic Power Systems sells its products globally through distributors, value-added resellers, and directly to original equipment manufacturers and other end customers.

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