Why Monolithic Power Systems (MPWR) Shares Are Trading Lower Today

Jabin Bastian /
2023/05/05 9:56 am EDT

What Happened:

Shares of power management chips maker Monolithic Power Systems (NASDAQ: MPWR) fell 6.31% in the afternoon session after the company reported first-quarter results that narrowly beat analysts' revenue estimates. EPS also beat, and inventory level improved. However, gross margin missed and is expected to move lower over the near term as the company destocks excess inventory. Additionally on the negative front, the outlook for the company in the near term seems weak, with revenue guidance for the next quarter falling below the Consensus. In the press release, the CEO stated that the company remains " cautious about near-term business conditions."

What is the market telling us:

Monolithic Power Systems's shares are quite volatile and over the last year have had 30 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Monolithic Power Systems is up 18.1% since the beginning of the year, but at $402.92 per share it is still trading 25% below its 52-week high of $536.88 from August 2022. Investors who bought $1,000 worth of Monolithic Power Systems's shares 5 years ago would now be looking at an investment worth $3,270.

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