It has been about a month since the last earnings report for Monolithic Power Systems, Inc. MPWR . Shares have added about 8.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MPWR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Monolithic Power delivered fourth-quarter earnings of 82 cents, which beat the Zacks Consensus Estimate by a penny. The figure surged 26.2% from the year-ago quarter.
Revenues jumped 24% from the year-ago quarter to almost $129.4 million, better than the Zacks Consensus Estimate of $126 million. The figure was better than management's guidance of $123-$129 million.
DC to DC segment (92.1% of total revenues) revenues increased 26.8% year over year to $119.2 million. Lighting Control (6.5% of total revenues) climbed 9.1% to $10.3 million.
Consumer (42.4% of total revenues) revenues grew 44.6% from the year-ago quarter to $54.9 million. Computing & Storage (20.6% of total revenues) revenues rose 13.9% to $26.7 million. Industrial (12.5% of total revenues) revenues grew 6.7% to $16.2 million. Automotive (12.2% of total revenues) revenues were $15.8 million, up 57.7% from the year-ago quarter. However, Communications (12.2% of total revenues) revenues declined 7% to $15.9 million.
Non-GAAP gross margin expanded 30 basis points (bps) to 55.7% in the reported quarter. The figure was within the management's guidance of 55.2% and 56.2%.
Non-GAAP operating expenses were $33.9 million during the quarter, up 19.3% year over year. Operating margin expanded 150 bps from the year-ago quarter to 29.5%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $299 million at the end of fourth-quarter 2017 as compared with $305 million at the end of the previous quarter.
During the quarter, Monolithic Power declared a cash dividend of 30 cents per share, up from 20 cents in the previous quarter.
For the first quarter of 2017, Monolithic Power forecasts revenues in the range of $122-$128 million. Non-GAAP gross margin is projected between 55.3% and 56.3%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower.
Monolithic Power Systems, Inc. Price and Consensus
Monolithic Power Systems, Inc. Price and Consensus | Monolithic Power Systems, Inc. Quote
At this time, MPWR has a strong Growth Score of A, with the same score on the momentum front. The stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, MPWR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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