NASDAQ:MPWR, a strong growth stock, setting up for a breakout.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether MONOLITHIC POWER SYSTEMS INC (NASDAQ:MPWR) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but MONOLITHIC POWER SYSTEMS INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Assessing Growth for NASDAQ:MPWR

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:MPWR, the assigned 4 reflects its growth potential:

• MPWR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.95%, which is quite good.
• The Earnings Per Share has been growing by 29.50% on average over the past years. This is a very strong growth
• The Earnings Per Share is expected to grow by 18.78% on average over the next years. This is quite good.
• The Revenue is expected to grow by 15.94% on average over the next years. This is quite good.

Assessing Health for NASDAQ:MPWR

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:MPWR has earned a 9 out of 10:

• MPWR has an Altman-Z score of 41.03. This indicates that MPWR is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 41.03, MPWR belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
• MPWR has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• MPWR has a Current Ratio of 6.42. This indicates that MPWR is financially healthy and has no problem in meeting its short term obligations.
• MPWR's Current ratio of 6.42 is amongst the best of the industry. MPWR outperforms 87.96% of its industry peers.
• MPWR has a Quick Ratio of 5.16. This indicates that MPWR is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Quick ratio, with a value of 5.16, MPWR belongs to the top of the industry, outperforming 87.96% of the companies in the same industry.

Exploring NASDAQ:MPWR's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:MPWR scores a 8 out of 10:

• With an excellent Return On Assets value of 15.21%, MPWR belongs to the best of the industry, outperforming 86.11% of the companies in the same industry.
• With an excellent Return On Equity value of 18.47%, MPWR belongs to the best of the industry, outperforming 80.56% of the companies in the same industry.
• MPWR's Return On Invested Capital of 16.20% is amongst the best of the industry. MPWR outperforms 89.81% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for MPWR is significantly above the industry average of 12.01%.
• The Profit Margin of MPWR (21.29%) is better than 81.48% of its industry peers.
• MPWR's Profit Margin has improved in the last couple of years.
• The Operating Margin of MPWR (23.83%) is better than 83.33% of its industry peers.
• MPWR's Operating Margin has improved in the last couple of years.
• Looking at the Gross Margin, with a value of 55.29%, MPWR is in the better half of the industry, outperforming 75.93% of the companies in the same industry.

How does the Setup look for NASDAQ:MPWR

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NASDAQ:MPWR currently holds a 7 as its setup rating, suggesting a particular level of consolidation in the stock.

Although the technical rating is bad, MPWR does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of MPWR

For an up to date full technical analysis you can check the technical report of MPWR

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.