MONOLITHIC POWER SYSTEMS INC (NASDAQ:MPWR)—A High-Growth Stock Gearing Up for Its Next Upward Move.

In this article, we'll take a closer look at MONOLITHIC POWER SYSTEMS INC (NASDAQ:MPWR) as a potential candidate for growth investing. While it's important for investors to conduct their own research, MONOLITHIC POWER SYSTEMS INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

Assessing Growth for MPWR

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. MPWR has achieved a 8 out of 10:

• The Earnings Per Share has grown by an nice 19.95% over the past year.
• MPWR shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 29.50% yearly.
• The Revenue has grown by 21.20% in the past year. This is a very strong growth!
• The Revenue has been growing by 28.58% 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.
• Based on estimates for the next years, MPWR will show a quite strong growth in Revenue. The Revenue will grow by 15.94% on average per year.

Understanding MPWR's Health Score

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. MPWR scores a 9 out of 10:

• MPWR has an Altman-Z score of 39.60. This indicates that MPWR is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 39.60, MPWR belongs to the best of the industry, outperforming 96.30% of the companies in the same industry.
• There is no outstanding debt for MPWR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
• MPWR has a Current Ratio of 5.31. This indicates that MPWR is financially healthy and has no problem in meeting its short term obligations.
• The Current ratio of MPWR (5.31) is better than 79.63% of its industry peers.
• MPWR has a Quick Ratio of 3.89. This indicates that MPWR is financially healthy and has no problem in meeting its short term obligations.
• MPWR has a Quick ratio of 3.89. This is in the better half of the industry: MPWR outperforms 73.15% of its industry peers.

Understanding 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. MPWR scores a 9 out of 10:

• The Return On Assets of MPWR (49.40%) is better than 97.22% of its industry peers.
• Looking at the Return On Equity, with a value of 56.80%, MPWR belongs to the top of the industry, outperforming 96.30% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 13.73%, MPWR belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for MPWR is significantly above the industry average of 11.36%.
• The 3 year average ROIC (19.13%) for MPWR is well above the current ROIC(13.73%). The reason for the recent decline needs to be investigated.
• MPWR has a Profit Margin of 80.95%. This is amongst the best in the industry. MPWR outperforms 99.07% of its industry peers.
• In the last couple of years the Profit Margin of MPWR has grown nicely.
• MPWR's Operating Margin of 24.46% is amongst the best of the industry. MPWR outperforms 84.26% of its industry peers.
• In the last couple of years the Operating Margin of MPWR has grown nicely.
• MPWR's Gross Margin of 55.32% is fine compared to the rest of the industry. MPWR outperforms 76.85% of its industry peers.

How does the Setup look for MPWR

ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, MPWR has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is bad, MPWR does present a nice setup opportunity. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 632.55. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 567.63, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

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 article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.