Amid a downbeat earnings season for most semiconductor stocks, Monolithic Power Systems turned in one of the better quarterly reports. MPWR stock rose Friday on the news.
The Kirkland, Wash.-based company late Thursday delivered second-quarter results that topped estimates and guided higher than views for the third quarter.
Monolithic Power earned an adjusted $3.17 a share on sales of $507 million in the June quarter. Analysts polled by FactSet had expected earnings of $3.07 a share on sales of $491 million. On a year-over-year basis, earnings rose 12% while sales climbed 15%.
For the current quarter, Monolithic predicted revenue of $600 million, based on the midpoint of its outlook. Analysts had been modeling $550 million.
Monolithic makes high-performance, semiconductor-based power management electronics systems.
"As we have emphasized for many years, our results reflect the continued success of our proven, long-term growth strategy and our transformation from being only a chip supplier to a full solutions provider," Chief Executive Michael Hsing said in a news release.
MPWR Stock Is A Recent Breakout
On the stock market today, MPWR stock rose 1.4% to close at 795.76.
On May 15, MPWR stock broke out of a cup-with-handle base at a buy point of 733.31, according to IBD MarketSurge. It climbed to a record high of 891.67 on July 16 before pulling back.
Needham analyst Quinn Bolton called Monolithic's earnings report "a shining beacon of light amid a dark EPS season."
Monolithic is benefiting from increasing demand for power solutions for AI data centers, Bolton said in a client note. However, other market segments are growing as well, he said.
Bolton reiterated his buy rating on MPWR stock and raised his price target to 1,000 from 800.
Monolithic Is 'A Rose Among Thorns'
KeyBanc Capital Markets analyst John Vinh maintained his overweight rating on MPWR stock but hiked his price target to 1,075 from 975.
Oppenheimer analyst Rick Schafer said Monolithic's Q2 report is a "rose among thorns" for semiconductor stocks this earnings season.
"Shrugging off recent peer malaise, MPWR delivered standout beat/raise results," Schafer said in a client note. He rates MPWR stock as outperform with a price target of 900.
This week, several major semiconductor stocks fell after disappointing earnings reports. They included Arm Holdings, Intel, Lattice Semiconductor, Microchip Technology and Skyworks Solutions.
MPWR stock ranks fourth out of 39 stocks in IBD's fabless chipmaker industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 94 out of 99.
Further, MPWR stock is on the IBD Long-Term Leaders watchlist and Tech Leaders list.
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