Quantcast

Monolithic Power (MPWR) Q2 Earnings: What's in the Cards?


Shutterstock photo

Monolithic Power Systems Inc.MPWR is set to report second-quarter 2018 results on Jul 25. Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, recording an average positive surprise of 1.94%.

In the first quarter of fiscal 2018, Monolithic Power delivered earnings of 79 cents, which outpaced the Zacks Consensus Estimate by a couple of cents. The figure surged 36.2% on a year-over-year basis.

Revenues surpassed the Zacks Consensus Estimate of $125 million and improved 28.7% from the year-ago quarter to $129.2 million. The figure was better than management's guidance of $122-$128 million.

Robust demand in high-end consumer markets, including the likes of power chargers, lighting and home appliances aided growth. The company's strategic business mix in diversified markets is also a positive. Management revealed that upside in few traditional consumer markets benefited performance.

What to Expect?

For the second quarter of 2018, Monolithic Power forecasts revenues in the range of $135-$141million. The Zacks Consensus Estimate for revenues is estimated to be $139.6 million.

Further, the Zacks Consensus Estimate for earnings is pegged at 9 cents per share, up 32.4% year over year.

Factors to Consider

The increasing demand for analog Integrated Circuit ("IC") and sensors, and deep-rooted partnerships with leading auto suppliers remains a tailwind. Monolithic Power expects its Served Addressed Market ("SAM") for the automotive industry to expand significantly, bolstering revenues.

We anticipate the company to benefit from the ongoing Grantley to Purley platform conversion in the server market as well as from increased demand for servers due to the ongoing adoption of cloud computing.

Monolithic Power is also utilizing artificial intelligence (AI) to predict user performance and enhance e-commerce platform. This will help users to input desired products and specific needs. This customer centric approach will not only expand customer base but also help the company penetrate the small and medium business segment.

Robust demand in high-end consumer markets, including the likes of power chargers, lighting and home appliances remains a key catalyst. The company's strategic business mix in diversified markets is also a positive. Management revealed that upside in few traditional consumer markets benefited performance. We believe that all these factors will positively impact the company's results in the to-be reported quarter and bolster its customer base going ahead.

However, intensifying competition and Customer concentration are headwinds.

Monolithic Power Systems, Inc. Price and EPS Surprise

Monolithic Power Systems, Inc. Price and EPS Surprise | Monolithic Power Systems, Inc. Quote



What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Monolithic Power has a Zacks Rank #3 and an Earnings ESP of 0.00%. This combination makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stocks to Consider

Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in its upcoming release:

Hubbell Inc HUBB has an Earnings ESP of +1.97% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Texas Instruments Incorporated TXN has an Earnings ESP of +0.96% and a Zacks Rank #2.

Lockheed Martin Corporation LMT has an Earnings ESP of +0.14% and a Zacks Rank #2.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.     

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.  

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Hubbell Inc (HUBB): Free Stock Analysis Report

Texas Instruments Incorporated (TXN): Free Stock Analysis Report

Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: LMT , HUBB , TXN , MPWR



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?