Shares of Monolithic Power Systems Inc. (MPWR - Free Report) declined more than 3% in the last couple of trading sessions following the company’s fourth-quarter 2016 results. The fall apparently exhibited investor disappointment in first-quarter 2017 guidance, which forecasts revenue decline on a sequential basis.
The company reported adjusted earnings (including stock-based compensation) of 40 cents per share, which beat the Zacks Consensus Estimate by a nickel. Notably, the company registered an earnings beat after two consecutive misses.
Moreover, earnings (excluding stock-based compensation) surged 27.5% from the year-ago quarter to 65 cents per share. The year-over-year growth in earnings was primarily driven by top-line growth and margin expansion.
Revenues advanced 19.2% year over year to $103.6 million. Gross and operating margin expanded 50 basis points (bps) and 600 bps, respectively driven by higher top-line base and stringent cost control measures.
In 2016, earnings climbed 21.7% to $2.30 per share driven by revenue growth of 16.7%, which totaled $388.7 million. The company stated that the year-over-year revenue growth compared favorably with the analog industry, which SIA estimates grew 5.8% over 2015.
However, we note that the revenue growth failed to boost share price return in the last one year. Monolithic (up 52.4%) has unperformed the Zacks Semiconductor – Analog & Mixed industry (58.9%) in the same period.
Segment Details
In terms of end-market, Consumer (36.6% of total revenue) revenues dipped 1.6% to almost $38 million. However, Industrial (24.3%), Storage and Computing (22.6%) and Communications (16.5%) increased 40.5%, 60.8% and 7.6% to $25.2 million, $23.4 million and $17 million, respectively.
In terms of product family, DC to DC (90.7% of revenue) improved 21.2% to nearly $94 million. Lighting control revenues increased 2.5% from the year-ago quarter to $9.6 million.
Guidance
Monolithic forecasts revenues in the range of $98–$102 million for first-quarter 2017, which reflects a sequential decline of 5.4–1.5%.
Non-GAAP gross margin is anticipated to be in the range of 54.8–55.8%. R&D and SG&A expenses are expected to be approximately $28.3 million and $30.3 million.
Zacks Rank & Key Picks
Monolithic carries a Zacks Rank #3 (Hold). Better-ranked stocks are Microchip (MCHP - Free Report) , Silicon Laboratories (SLAB - Free Report) and Maxim . While both Microchip and Silicon sports a Zacks Rank #1 (Strong Buy), Maxim carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Microchip, Silicon and Maxim is currently pegged at 12.46%, 12.50% and 10.25%, respectively.
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Shares of Monolithic Power Systems Inc. (MPWR - Free Report) declined more than 3% in the last couple of trading sessions following the company’s fourth-quarter 2016 results. The fall apparently exhibited investor disappointment in first-quarter 2017 guidance, which forecasts revenue decline on a sequential basis.
The company reported adjusted earnings (including stock-based compensation) of 40 cents per share, which beat the Zacks Consensus Estimate by a nickel. Notably, the company registered an earnings beat after two consecutive misses.
Moreover, earnings (excluding stock-based compensation) surged 27.5% from the year-ago quarter to 65 cents per share. The year-over-year growth in earnings was primarily driven by top-line growth and margin expansion.
Revenues advanced 19.2% year over year to $103.6 million. Gross and operating margin expanded 50 basis points (bps) and 600 bps, respectively driven by higher top-line base and stringent cost control measures.
In 2016, earnings climbed 21.7% to $2.30 per share driven by revenue growth of 16.7%, which totaled $388.7 million. The company stated that the year-over-year revenue growth compared favorably with the analog industry, which SIA estimates grew 5.8% over 2015.
However, we note that the revenue growth failed to boost share price return in the last one year. Monolithic (up 52.4%) has unperformed the Zacks Semiconductor – Analog & Mixed industry (58.9%) in the same period.
Segment Details
In terms of end-market, Consumer (36.6% of total revenue) revenues dipped 1.6% to almost $38 million. However, Industrial (24.3%), Storage and Computing (22.6%) and Communications (16.5%) increased 40.5%, 60.8% and 7.6% to $25.2 million, $23.4 million and $17 million, respectively.
In terms of product family, DC to DC (90.7% of revenue) improved 21.2% to nearly $94 million. Lighting control revenues increased 2.5% from the year-ago quarter to $9.6 million.
Guidance
Monolithic forecasts revenues in the range of $98–$102 million for first-quarter 2017, which reflects a sequential decline of 5.4–1.5%.
Non-GAAP gross margin is anticipated to be in the range of 54.8–55.8%. R&D and SG&A expenses are expected to be approximately $28.3 million and $30.3 million.
Zacks Rank & Key Picks
Monolithic carries a Zacks Rank #3 (Hold). Better-ranked stocks are Microchip (MCHP - Free Report) , Silicon Laboratories (SLAB - Free Report) and Maxim . While both Microchip and Silicon sports a Zacks Rank #1 (Strong Buy), Maxim carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Microchip, Silicon and Maxim is currently pegged at 12.46%, 12.50% and 10.25%, respectively.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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