How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Monolithic Power (MPWR) ten years ago? It may not have been easy to hold on to MPWR for all that time, but if you did, how much would your investment be worth today?
Monolithic Power's Business In-Depth
With that in mind, let's take a look at Monolithic Power's main business drivers.
Monolithic Power Systems, based in Kirkland, WA, designs, develops and markets high-performance power solutions. The company focuses on the market for high-performance analog and mixed-signal integrated circuits (ICs).
Monolithic’s products are widely utilized in industrial applications, telecommunication infrastructures, cloud computing, automotive and consumer applications.
Being a fabless company, Monolithic works with third-party contractors and chip assemblers for the manufacturing, assembling and testing of wafers and ICs. This approach permits the company to focus more on the designing and development of process technology at a lower-fixed cost.
Unlike other fabless semiconductor companies, Monolithic installs its own proprietary process technologies in third-party contractors’ equipment and facilities.
Monolithic reported total revenues of $1,208 million in 2021. The company’s key product families are direct current to direct current (DC to DC) products and Lighting Control products.
DC to DC ICs are used to convert and control voltages within a broad range of electronic systems, such as portable electronic devices, wireless LAN access points, computers and monitors, automobiles and medical equipment. The product line accounted for 95% of total revenues in 2021.
Lighting control ICs are used in backlighting and general illumination products. The product line accounted for 5% of total revenues in 2021.
End-market wise, 35.2% of total revenues came from Computing and Storage for the year ended Dec 31, 2021.
Precisely, Consumer, Industrial, Automotive and Communications end-markets contributed 19.7%, 14.7%, 16.8% and 13.6%, respectively to 2021 revenues.
Monolithic’s primary competitors are Analog Devices, Infineon Technologies, Renesas Electronics (post Intersil acquisition), Analog Devices (post Linear Technology acquisition and impending buyout of Maxim Integrated), NXP Semiconductors, ON Semiconductor, Power Integrations, ROHM Semiconductor, Semtech and Texas Instruments.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Monolithic Power ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in August 2012 would be worth $26,510.46, or a gain of 2,551.05%, as of August 8, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 198% and the price of gold went up 5.63% over the same time frame.
Going forward, analysts are expecting more upside for MPWR.
Monolithic Power beat second-quarter earnings and revenue estimates on strong sales in Storage and Computing and Enterprise Data.The company is on track to expand capacity in 2022 well beyond $2 billion, which will ramp up new product revenues. It is likely to gain from the rapid deployment of 5G on the back of a robust portfolio of legacy routers, wireless applications and 5G networking infrastructure-related products. In automotive, the company is witnessing sales growth in infotainment, lighting and Advanced Driver Assistance Systems products. However, the pandemic-triggered macroeconomic weakness and stiff competition in the analog market remain major concerns. The lack of geographic diversity of end customers is another headwind. Rapid product obsolescence, price erosion, evolving standards and short product life-cycles are other challenges.
The stock is up 34.60% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 8 higher, for fiscal 2022. The consensus estimate has moved up as well.
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