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Research Alert: CFRA Keeps Hold Opinion On Shares Of Monolithic Power Systems

· 02/05/2021 04:19

09:15 AM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We up our 12-month target to $370 from $320, on a P/E of 55.4x our 2022 estimate, above peers to reflect our view of growth. We raise our 2021 EPS view to $5.77 from $5.64 and '22 to $6.68 from $6.50. MPWR posts Q4 EPS of $1.31 vs. $1.04, beating the $1.24 EPS estimate. Sales rose 40%, better than expected, driven by growth in consumer +70%, automotive +63%, industrial +39%, communications +36%, and computing and storage +11%. Gross margin was flat at 55.7%. We think prior capacity expansion by MPWR will help the company meet strong demand in areas like automotive and industrial, as MPWR is seeing greater traction for infotainment and autonomous driving capabilities as well as applications in power sources. While days of inventory rose to 137 from 116 in Q3, we expect it to remain well below MPWR's 180-200 day target through the year. While we like net cash of $598M cash (no debt) and share gain potential amid a favorable industry landscape, we think its frothy valuation fully reflects our positive outlook.