Pay Less, Gain More: MU, NVDA Top Monolithic Power Systems Stock
MU, NVDA are Monolithic Power Systems’s peers in Semiconductors industry that have:
1) Lower valuation (P/OpInc) compared to Monolithic Power Systems stock
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying MU, NVDA stocks vs. MPWR stock
Smart investing isn’t about stock picking or prediction, it’s about asset allocation. See how Trefis’ Boston-based, wealth management partner does it. It has included High Quality Portfolio as part of its asset allocation strategy.
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Key Metrics Compared
| Metric | MPWR | MU | NVDA |
|---|---|---|---|
| P/OpInc* | 71.0x | 37.7x | 33.9x |
| LTM OpInc Growth | 35.1% | 198.9% | 60.1% |
| 3Y Avg OpInc Growth | 12.8% | 59.8% | 232.8% |
| LTM Revenue Growth | 26.4% | 45.4% | 65.5% |
| 3Y Avg Revenue Growth | 16.4% | 28.3% | 101.8% |
OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio
But do these numbers tell the full story? Read Buy or Sell MPWR Stock to see if Monolithic Power Systems still has an edge that holds up under the hood. As a quick background, Monolithic Power Systems (MPWR) provides DC-to-DC integrated circuits for voltage conversion and control in electronic systems, distributed through third-party distributors and value-added resellers.
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Monolithic Power Systems stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Monolithic Power Systems in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Monolithic Power Systems would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | MPWR | MU | NVDA |
|---|---|---|---|
| P/OpInc* | 42.7x | 11.6x | 25.5x |
| LTM OpInc Growth | 42.5% | 651.6% | 55.0% |
| 3Y Avg OpInc Growth | 16.0% | 206.8% | 160.8% |
| LTM Revenue Growth | 30.5% | 48.9% | 65.2% |
| 3Y Avg Revenue Growth | 17.2% | 20.3% | 91.6% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | MPWR | MU | NVDA |
|---|---|---|---|
| P/S | 18.5x | 12.3x | 20.5x |
| Market Cap (Current) | $ 51.7 Bil | $ 519.4 Bil | $ 4.4 Tril |
| LTM Revenue | $ 2.79 Bil | $ 42.31 Bil | $ 215.94 Bil |
| LTM Opinc | $ 728.64 Mil | $ 13.77 Bil | $ 130.39 Bil |
| LTM Op Margin | 26.1% | 32.5% | 60.4% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the its benchmark – a combination of S&P 500, Russell, and S&P midcap index.