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Unpacking Q3 Earnings: Monolithic Power Systems (NASDAQ:MPWR) In The Context Of Other Analog Semiconductors Stocks


Petr Huřťák /
2023/01/24 5:44 am EST

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Monolithic Power Systems (NASDAQ:MPWR), and the best and worst performers in the analog semiconductors group.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 10 analog semiconductors stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 1.28%, while on average next quarter revenue guidance was 2.24% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but analog semiconductors stocks held their ground better than others, with the share prices up 16% since the previous earnings results, on average.

Monolithic Power Systems (NASDAQ:MPWR)

Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.

Monolithic Power Systems reported revenues of $495.4 million, up 53.1% year on year, in line with analyst expectations. It was a decent quarter for the company, with a significant improvement in operating margin but underwhelming revenue guidance for the next quarter.

“Even though business conditions are softening, our market share continues to expand reflecting high customer engagement and our ability to secure design wins. We can now focus on growing our long-term business,” said Michael Hsing, CEO and founder of MPS.

Monolithic Power Systems Total Revenue

Monolithic Power Systems pulled off the fastest revenue growth of the whole group. The stock is up 28.9% since the results and currently trades at $425.

Is now the time to buy Monolithic Power Systems? Access our full analysis of the earnings results here, it's free.

Best Q3: Vishay Intertechnology (NYSE:VSH)

Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.

Vishay Intertechnology reported revenues of $924.7 million, up 13.6% year on year, inline with analyst expectations. It was an impressive quarter for the company, with a significant improvement in gross margin and a beat on the bottom line.

Vishay Intertechnology Total Revenue

Vishay Intertechnology had the weakest performance against analyst estimates among its peers. The stock is up 5.65% since the results and currently trades at $22.59.

Is now the time to buy Vishay Intertechnology? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Texas Instruments (NASDAQ:TXN)

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Texas Instruments reported revenues of $5.24 billion, up 12.8% year on year, beating analyst expectations by 1.9%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.

The stock is up 9.45% since the results and currently trades at $177.50.

Read our full analysis of Texas Instruments's results here.

Microchip Technology (NASDAQ:MCHP)

Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.

Microchip Technology reported revenues of $2.07 billion, up 25.6% year on year, in line with analyst expectations. It was a decent quarter for the company, with very optimistic guidance for the next quarter but an increase in inventory levels.

The stock is up 27.8% since the results and currently trades at $76.01.

Read our full, actionable report on Microchip Technology here, it's free.

MACOM Technology (NASDAQ:MTSI)

Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.

MACOM Technology reported revenues of $178.1 million, up 14.7% year on year, in line with analyst expectations. It was a solid quarter for the company, with a significant improvement in operating margin.

The stock is up 14.8% since the results and currently trades at $65.99.

Read our full, actionable report on MACOM Technology here, it's free.

The author has no position in any of the stocks mentioned