A month has gone by since the last earnings report for Monolithic Power (MPWR Quick QuoteMPWR - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Monolithic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Monolithic Power Q1 Earnings Beat on Higher Revenues

Monolithic reported healthy first-quarter 2024 results, with the bottom and the top lines beating the respective Zacks Consensus Estimate. Despite declining trends in several verticals, the Kirkland, WA-based company witnessed modest revenue growth year over year, backed by strong momentum in the Enterprise Data vertical.

Net Income

Net income, on a GAAP basis, was $92.5 million or $1.89 per share compared with $109.8 million or $2.26 per share in the year-ago quarter. Higher operating expenses primarily led to this downturn in the net income.

Non-GAAP net income declined to $137.5 million or $2.81 per share from $146 million or $3 per share in the prior-year quarter. However, the bottom line surpassed the Zacks Consensus Estimate by 15 cents.

Revenues

Monolithic Power generated revenues of $457.9 million, up from $451.1 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $448 million. Growth in Enterprise Data is mostly offset by weakness in the Consumer, Communications and Industrial vertical.

Storage and Computing revenues were $106.1 million, down 11.4% year over year. Lower sales of products for storage solutions affected net sales in this vertical. Revenues fell short of the Zacks Consensus Estimate of $109 million.

Net sales from Enterprise Data improved to $149.7 million from $47.2 million in the year-ago quarter, backed by growing sales of server solutions. Revenues surpassed the Zacks Consensus Estimate of $145 million.

In the first quarter, the Automotive segment contributed $87.1 million in revenues compared with $105.3 million in the year-ago quarter. Lower digital cockpit sales impacted revenues in this segment. The top line beat the Zacks Consensus Estimate of $83 million.

Industrial revenues stood at $30.2 million compared with $47.5 million in the year-ago quarter. Soft demand for point-of-sale applications impeded the segment’s revenues. The top line missed the Zacks Consensus Estimate of $30.95 million.

The Communications vertical registered $46.7 million in revenues compared with $67.9 million in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $39.88 million.

Net sales from the Consumer segment declined to $38.1 million from $63.4 million in the year-ago quarter. Lower gaming revenues impacted the top line. Net sales marginally missed the Zacks Consensus Estimate of $39.24 million.

By product family, revenues in DC-to-DC were $416 million, down from $425.2 million in the year-ago quarter. In the first quarter, Lighting Control revenues increased to $41.9 million from $25.9 million in the prior-year quarter.

Other Details

Non-GAAP gross margin was 55.7%, down from 57.7% reported in the year-ago quarter. Non-GAAP operating expenses came in at $103.4 million compared with $96 million reported in the prior-year period. Non-GAAP operating income was $151.6 million, down from $164.1 million in the year-earlier quarter.

Cash Flow & Liquidity

During the March quarter, the company generated an operating cash flow of $248 million. As of Mar 31, 2024, cash and cash equivalents totaled $488.3 million, with $86.9 million in other long-term liabilities.

Outlook

For the second quarter of 2024, the company estimates revenues within the range of $480-$500 million. Non-GAAP gross margin is expected between 55.4% and 56%. Non-GAAP operating expenses are projected between $106.1 million to $108.1 million. Total stock-based compensation expenses are expected in the range of $43.2 million to $45.2 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Monolithic has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Monolithic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Monolithic belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, NXP Semiconductors (NXPI Quick QuoteNXPI - Free Report) , has gained 6.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

NXP reported revenues of $3.13 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $3.24 for the same period compares with $3.19 a year ago.

NXP is expected to post earnings of $3.20 per share for the current quarter, representing a year-over-year change of -6.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

NXP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.