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.
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