POWER INTEGRATIONS INC (POWI) Stock Fundamental Analysis
NASDAQ:POWI - Nasdaq - US7392761034 - Common Stock - Currency: USD
POWI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 107 industry peers in the Semiconductors & Semiconductor Equipment industry. POWI has an excellent financial health rating, but there are some minor concerns on its profitability. POWI is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year POWI was profitable.
In the past year POWI had a positive cash flow from operations.
Each year in the past 5 years POWI has been profitable.
POWI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.89%, POWI is in the better half of the industry, outperforming 61.68% of the companies in the same industry.
POWI's Return On Equity of 4.30% is in line compared to the rest of the industry. POWI outperforms 54.21% of its industry peers.
POWI has a Return On Invested Capital (1.83%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for POWI is below the industry average of 11.66%.
The 3 year average ROIC (7.88%) for POWI is well above the current ROIC(1.83%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 4.3% | ||
| ROIC | 1.83% |
ROA(3y)10.34%
ROA(5y)11.02%
ROE(3y)11.45%
ROE(5y)12.23%
ROIC(3y)7.88%
ROIC(5y)8.99%
1.3 Margins
Looking at the Profit Margin, with a value of 7.69%, POWI is in line with its industry, outperforming 59.81% of the companies in the same industry.
POWI's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 4.28%, POWI perfoms like the industry average, outperforming 54.21% of the companies in the same industry.
In the last couple of years the Operating Margin of POWI has declined.
POWI's Gross Margin of 53.64% is fine compared to the rest of the industry. POWI outperforms 71.96% of its industry peers.
POWI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.28% | ||
| PM (TTM) | 7.69% | ||
| GM | 53.64% |
OM growth 3Y-44.4%
OM growth 5Y-17.81%
PM growth 3Y-30.96%
PM growth 5Y-30.07%
GM growth 3Y1.52%
GM growth 5Y1.13%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), POWI is destroying value.
The number of shares outstanding for POWI remains at a similar level compared to 1 year ago.
The number of shares outstanding for POWI has been reduced compared to 5 years ago.
There is no outstanding debt for POWI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
POWI has an Altman-Z score of 30.46. This indicates that POWI is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 30.46, POWI belongs to the best of the industry, outperforming 91.59% of the companies in the same industry.
There is no outstanding debt for POWI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 30.46 |
ROIC/WACC0.16
WACC11.66%
2.3 Liquidity
A Current Ratio of 9.29 indicates that POWI has no problem at all paying its short term obligations.
POWI has a Current ratio of 9.29. This is amongst the best in the industry. POWI outperforms 94.39% of its industry peers.
A Quick Ratio of 6.30 indicates that POWI has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 6.30, POWI belongs to the top of the industry, outperforming 92.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 9.29 | ||
| Quick Ratio | 6.3 |
3. Growth
3.1 Past
POWI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.08%.
POWI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.03% yearly.
Looking at the last year, POWI shows a decrease in Revenue. The Revenue has decreased by -5.74% in the last year.
POWI shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.08% yearly.
EPS 1Y (TTM)-10.08%
EPS 3Y-29.14%
EPS 5Y-2.03%
EPS Q2Q%36.36%
Revenue 1Y (TTM)-5.74%
Revenue growth 3Y-15.86%
Revenue growth 5Y-0.08%
Sales Q2Q%17.59%
3.2 Future
POWI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.06% yearly.
POWI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.36% yearly.
EPS Next Y37.7%
EPS Next 2Y35.43%
EPS Next 3Y31.06%
EPS Next 5YN/A
Revenue Next Year13.5%
Revenue Next 2Y15.28%
Revenue Next 3Y16.36%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 55.94, POWI can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of POWI is on the same level as its industry peers.
POWI is valuated expensively when we compare the Price/Earnings ratio to 29.53, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 40.62, which means the current valuation is very expensive for POWI.
POWI's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.65, POWI is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.94 | ||
| Fwd PE | 40.62 |
4.2 Price Multiples
POWI's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of POWI indicates a somewhat cheap valuation: POWI is cheaper than 63.55% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.82 | ||
| EV/EBITDA | 59.75 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as POWI's earnings are expected to grow with 31.06% in the coming years.
PEG (NY)1.48
PEG (5Y)N/A
EPS Next 2Y35.43%
EPS Next 3Y31.06%
5. Dividend
5.1 Amount
POWI has a Yearly Dividend Yield of 1.26%.
POWI's Dividend Yield is rather good when compared to the industry average which is at 2.21. POWI pays more dividend than 83.18% of the companies in the same industry.
With a Dividend Yield of 1.26, POWI pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
5.2 History
On average, the dividend of POWI grows each year by 18.21%, which is quite nice.
POWI has paid a dividend for at least 10 years, which is a reliable track record.
POWI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)18.21%
Div Incr Years12
Div Non Decr Years16
5.3 Sustainability
POWI pays out 142.82% of its income as dividend. This is not a sustainable payout ratio.
POWI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP142.82%
EPS Next 2Y35.43%
EPS Next 3Y31.06%
64.89
+0.13 (+0.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners103.31%
Inst Owner Change-88.61%
Ins Owners1.38%
Ins Owner Change4.01%
Market Cap3.69B
Analysts81.82
Price Target79.56 (22.61%)
Short Float %6.01%
Short Ratio8.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
Yearly Dividend0.81
Dividend Growth(5Y)18.21%
DP142.82%
Div Incr Years12
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.75%
Min EPS beat(2)6.56%
Max EPS beat(2)8.93%
EPS beat(4)4
Avg EPS beat(4)15.87%
Min EPS beat(4)4.91%
Max EPS beat(4)43.09%
EPS beat(8)6
Avg EPS beat(8)13.48%
EPS beat(12)9
Avg EPS beat(12)9.8%
EPS beat(16)13
Avg EPS beat(16)10.96%
Revenue beat(2)0
Avg Revenue beat(2)-1.46%
Min Revenue beat(2)-1.86%
Max Revenue beat(2)-1.06%
Revenue beat(4)0
Avg Revenue beat(4)-0.97%
Min Revenue beat(4)-1.86%
Max Revenue beat(4)-0.07%
Revenue beat(8)0
Avg Revenue beat(8)-1.83%
Revenue beat(12)0
Avg Revenue beat(12)-2.3%
Revenue beat(16)2
Avg Revenue beat(16)-0.86%
PT rev (1m)0%
PT rev (3m)-2.74%
EPS NQ rev (1m)5.19%
EPS NQ rev (3m)-29.35%
EPS NY rev (1m)3.3%
EPS NY rev (3m)3.3%
Revenue NQ rev (1m)-0.88%
Revenue NQ rev (3m)-17.91%
Revenue NY rev (1m)-0.26%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.94 | ||
| Fwd PE | 40.62 | ||
| P/S | 8.82 | ||
| P/FCF | 57.82 | ||
| P/OCF | 45.51 | ||
| P/B | 4.93 | ||
| P/tB | 5.71 | ||
| EV/EBITDA | 59.75 |
EPS(TTM)1.16
EY1.79%
EPS(NY)1.6
Fwd EY2.46%
FCF(TTM)1.12
FCFY1.73%
OCF(TTM)1.43
OCFY2.2%
SpS7.36
BVpS13.17
TBVpS11.35
PEG (NY)1.48
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 4.3% | ||
| ROCE | 2.32% | ||
| ROIC | 1.83% | ||
| ROICexc | 2.99% | ||
| ROICexgc | 3.83% | ||
| OM | 4.28% | ||
| PM (TTM) | 7.69% | ||
| GM | 53.64% | ||
| FCFM | 15.25% |
ROA(3y)10.34%
ROA(5y)11.02%
ROE(3y)11.45%
ROE(5y)12.23%
ROIC(3y)7.88%
ROIC(5y)8.99%
ROICexc(3y)14.11%
ROICexc(5y)18.03%
ROICexgc(3y)18.24%
ROICexgc(5y)23.71%
ROCE(3y)9.98%
ROCE(5y)11.38%
ROICexcg growth 3Y-55.85%
ROICexcg growth 5Y-25.1%
ROICexc growth 3Y-55.34%
ROICexc growth 5Y-23.04%
OM growth 3Y-44.4%
OM growth 5Y-17.81%
PM growth 3Y-30.96%
PM growth 5Y-30.07%
GM growth 3Y1.52%
GM growth 5Y1.13%
F-Score6
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 49.99% | ||
| Cap/Sales | 4.13% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 154.6% | ||
| Profit Quality | 198.22% | ||
| Current Ratio | 9.29 | ||
| Quick Ratio | 6.3 | ||
| Altman-Z | 30.46 |
F-Score6
WACC11.66%
ROIC/WACC0.16
Cap/Depr(3y)70.32%
Cap/Depr(5y)119.47%
Cap/Sales(3y)4.95%
Cap/Sales(5y)7.21%
Profit Quality(3y)127.26%
Profit Quality(5y)114.14%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.08%
EPS 3Y-29.14%
EPS 5Y-2.03%
EPS Q2Q%36.36%
EPS Next Y37.7%
EPS Next 2Y35.43%
EPS Next 3Y31.06%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.74%
Revenue growth 3Y-15.86%
Revenue growth 5Y-0.08%
Sales Q2Q%17.59%
Revenue Next Year13.5%
Revenue Next 2Y15.28%
Revenue Next 3Y16.36%
Revenue Next 5YN/A
EBIT growth 1Y-48.85%
EBIT growth 3Y-53.22%
EBIT growth 5Y-17.88%
EBIT Next Year90.39%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y42.38%
FCF growth 3Y-29.66%
FCF growth 5Y-20.36%
OCF growth 1Y23.45%
OCF growth 3Y-29.42%
OCF growth 5Y-18.41%