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Will Higher Revenues Boost Monolithic Power's Q4 Earnings?

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Monolithic Power Systems, Inc. (MPWR - Free Report) is set to report its fourth-quarter 2024 results on Feb. 6, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 2.53%. It pulled off a trailing four-quarter earnings surprise of 3.12%, on average.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

This Kirkland, WA-based company is likely to report higher revenues year over year in the fourth quarter, driven by solid traction in several verticals. Management’s effort to expand and diversify its supply chain is a positive factor.

Factors at Play for MPWR

Monolithic Power is witnessing healthy demand trends in the automotive segment backed by its robust product portfolio that targets In-Car connectivity and infotainment, advanced driver assistance system. Its deep-rooted partnerships with leading auto suppliers will likely boost top line. Increasing demand for Wi-Fi, optical, networking and router solutions is a key growth driver for the Communications segment. Demand remains steady in the Enterprise Data segment. However, fierce competition in the analog integrated circuit market remains a major concern.

The consensus estimate for revenues from the Enterprise Data vertical is pegged at $190.28 million, implying solid growth from $128.9 million in the year-ago quarter. The Zacks Consensus Estimate for net sales in the Communication segment is pegged at $69.05 million, suggesting growth from $40.93 million in the year-ago quarter.
 
Contribution from the consumer vertical is expected to be $60.42 million, implying growth from $43.74 million reported in the year-ago quarter. The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $43.58 million, suggesting an improvement from the $33.38 million reported in the prior-year quarter.
 
Revenues from the storage and computing vertical are expected to be $135.27 million, indicating growth from the prior-year quarter’s tally of $117.31 million. Net sales from the automotive vertical are pegged at $112.05 million, indicating an increase from $89.76 million reported in the year-ago quarter.

For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $610.51 million, suggesting an increase from $454.01 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $4.01, implying growth from $2.88 reported in the prior-year quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Monolithic Power this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: MPWR currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:

The Earnings ESP for Qualcomm Technologies, Inc. (QCOM - Free Report) is +3.34%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report its quarterly numbers on Feb. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Akamai Technologies, Inc. (AKAM - Free Report) is +0.09%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report its quarterly numbers on Feb. 20.

The Earnings ESP for Watts Water Technologies (WTS - Free Report) is +0.40%, and it carries a Zacks Rank of 3 at present. The company is scheduled to report its quarterly numbers on Feb. 10.

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