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Monolithic Power (MPWR) Designs Ventilator to Fight COVID-19

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Monolithic Power Systems, Inc. MPWR recently announced that it has built an emergency ventilator to aid medical workers in their fight against the coronavirus pandemic.

The new ventilator is based on the open-source design available from MIT and can be used as an automated resuscitator in the absence of an actual ICU ventilator.

Moreover, the low-cost ventilator allows easy access and removal, in case human intervention is needed. It also comes with features like strong battery backup and a power-loss alarm that ensure greater reliability. Notably, the company is currently looking for collaborators to scale up the manufacturing process in a short period of time.

The new venture bodes well for Monolithic Power’s prospects owing to the huge demand for ventilators in the market. The product is also likely to generate goodwill for its brand and boost investor confidence in the company.

Notably, shares of Monolithic Power have lost 5.7% on a year-to-date basis compared with the industry’s decline of 21.6%.

Monolithic Power Systems, Inc. Price and Consensus

 

New Ventilators to Drive Top-Line Growth

The company’s foray into ventilator manufacturing is expected to drive the top line in the near term and expand its market footprint.

As traditional ventilator manufacturers like Philips and GE Healthcare are under increased pressure due to the pandemic, Monolithic is poised to benefit owing to its enhanced power management and motor control capabilities.

Moreover, the semiconductor company will be able to carve out a space in the global medical ventilators market, which, is expected to witness a CAGR of 8.5% between 2020 and 2025, per VynZ Research data.

Other Companies Chip In

Markedly, companies from other industries are jumping on the ventilator bandwagon as well. Notably, Flex, an electronics contract manufacturer, recently pledged to manufacture parts for around 25,000 to 30,000 ventilators a month by May or June.

Additionally, companies like Ford, Tesla, General Motors, Siemens and Dyson are ramping up the production of ventilators.

We believe the entry of electronic component manufacturers and even automakers into the ventilator market, to address the demand amid the coronavirus crisis, bodes well for the overall healthcare system.

Zacks Rank and Stocks to Consider

Currently, Monolithic Power carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Avid Technology AVID, CyberOptics Corp. (CYBE - Free Report) and LogMeIn, Inc. LOGM, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Avid Technology, CyberOptics and LogMeIn is currently pegged at 20%, 12% and 5%, respectively.

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