MONOLITHIC POWER SYSTEMS INC (MPWR): what the price requires
At today's price, MONOLITHIC POWER SYSTEMS INC (MPWR) is priced for today's economics sustained for ~26.6 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-15 · Source: https://boothcheck.com/report/MPWR
Headline
| Field | Value |
|---|---|
| Ticker | MPWR |
| Company | MONOLITHIC POWER SYSTEMS INC |
| Current price | $1290.29/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 27.1% |
| Must persist for | 26.6y |
| Multiple paid | 81x operating income |
Solve inputs: computed at a 14.5% cost of capital; growth searched up to the 25.8% self-funding ceiling; each 1pp moves the implied horizon ~3.5 years.
Reconcile: at the x-ray's 9.3% required return this reads ~12.8 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | -0.24σ |
| cohort percentile (of 177 peers) | 96 |
| sustained it ~10 years at this level | 13% |
| implied end-window share | 1% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 7.34x | 4 | expensive |
| Earnings | 8.53x | 5 | expensive |
| Relative | 4.60x | 5 | expensive |
| Growth | 1.64x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $614.59 | 2.10x | yes | FCF base $0.9B, growth 24% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $1223.01 | 1.06x | yes | Exit EV/EBITDA: 74.9x / 76.9x / 78.9x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $651.70 | 1.98x | yes | P/E 43.39x (blended: static sector reference 22x + trailing (TTM) 93x), scenarios: 34.9x / 43.4x / 51.9x (bear / base = reference held flat / bull), EV/EBITDA 34.28x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $149.49 | 8.63x | yes | BV/sh $74.68, ROE (TTM) 18.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $208.91 | 6.18x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $786.34 | 1.64x | yes | Rev $3.0B, growth 24% (input: historical growth; tapered), Terminal P/S: 9.7x / 12.0x / 14.3x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $167.88 | 7.69x | yes | EPS $13.99, growth 3% (input: historical EPS growth), PEG=26.80 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $95.26 | 13.54x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.55B × (1−22%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $206.26 | 6.26x | yes | BV $74.68 + 5yr PV of (ROE (TTM) 18.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $153.32 | 8.42x | yes | √(22.5 × EPS $13.99 × BVPS $74.68) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $280.59 | 4.60x | yes | EBITDA $0.82B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $153.62 | 8.40x | yes | FCF $629.5M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $106.24 | 12.15x | yes | SBC-adj FCF $0.41B (FCF $0.63B − SBC $0.22B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $181.32 | 7.12x | yes | EPS $13.99 × (8.5 + 2×3.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $52.28 | 24.68x | yes | BV $74.68 × (ROIC 6.5% / WACC 9.2%) (excluded from median) |
| P/Sales Sector | Relative | $300.26 | 4.30x | yes | Revenue $2.96B × sector P/S 5.0x |
| PEG Fair Value | Relative | $73.07 | 17.66x | yes | EPS $13.99 × (PEG 1.5 × growth 3.5% (input: historical EPS growth)) → PE 5.2x |
| Earnings Yield | Earnings | $151.24 | 8.53x | yes | EPS $13.99 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $1.4b |
| Net debt / NOPAT (after-tax) | -2.27x (net cash) |
| Net debt / operating income (pre-tax) | -1.78x (net cash) |
| Share count CAGR (dilution) | 0.5% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $1,563.49 (as of June 27, 2026) the market pays roughly 98x company-wide operating income, a multiple at the very top of the semiconductor peer distribution. The price implies operating growth held near its self-funding ceiling for close to three decades, a demanding bet on continued execution.
The engine is AI server power. Enterprise Data revenue grew about 98% year over year in Q1 2026 and is now nearly a third of the business, with Q2 guidance roughly 11% above prior Street consensus. The growth rate is within what the company has recently delivered; the stretch is how long it must persist.
The balance sheet is pristine, about $1.37 billion of net cash and no debt, so the risk is not solvency. It is concentration and cyclicality: revenue runs through a small set of distributors, manufacturing leans on Asian supply, and the price leaves no room for the AI cycle to cool.
Bull Case
The right frame is a mature, highly profitable analog franchise that has found a second growth engine. Monolithic Power makes power-management chips, a steady business it has run profitably for years, but the stage has shifted: AI server power has turned a mid-cycle semiconductor into a hypergrowth name. In Q1 2026 revenue rose 26% to $804 million and adjusted EPS rose 26% to $5.10, both beats, and the Enterprise Data segment grew about 98% year over year to nearly a third of the business. Management raised the Enterprise Data growth floor to around 85% as backlog visibility improved and guided Q2 revenue to a $900 million midpoint, roughly 11% above prior consensus. This is what a mature business looks like when a new end-market re-accelerates it.
The model is structurally advantaged. Monolithic Power is fabless and sells, in the filing's words, "to end customers primarily through third-party distributors and value-added resellers" after winning designs through "technical sales and applications engineering efforts" (FY2025 10-K, accession 0001437749-26-006113). Power-management content gets designed into a server board and stays there for the platform's life, which is the kind of switching cost that supports a 27% operating margin and a trailing return on equity near 18.5%. The optical-module demand that drove a 33% sequential jump in Communications shows the AI exposure runs broader than a single product line.
The balance sheet removes the financing risk entirely. Monolithic Power carries about $1.37 billion of net cash and no debt, so it funds its own growth and rising research spend from operations. The forward-growth methods reflect the re-acceleration: the DCF Exit Multiple lands at $1,456 and the Discounted Future Market Cap at $786, both far above the static methods. For a buyer who believes AI data-center power content keeps compounding, the bull case is a debt-free, high-margin design-win franchise riding one of the strongest secular demand curves in semiconductors.
Bear Case
The macro and regulatory exposure is the soft underbelly of an otherwise clean story. Monolithic Power is fabless and depends on Asian foundry and packaging supply, and the filing flags the currency leverage directly: "If the value of the Renminbi rises against the U.S. Dollar, there could be an increase in our manufacturing costs relative to competitors" with facilities located elsewhere (FY2025 10-K, accession 0001437749-26-006113). It also names the policy backdrop, noting that measures like the CHIPS Act "give competitive advantages to competing semiconductor companies" by subsidizing domestic capacity it does not own. Export controls, tariffs, and a US-China technology split sit on top of a supply chain concentrated in the exact region those frictions target. None of that shows in this quarter's numbers, and all of it has the most leverage on a company priced for three decades of compounding.
The revenue base is more concentrated than the diversified-end-markets narrative suggests. The filing is explicit that "a relatively small number of distributors account for a significant portion of our revenues," with the top distributors carrying an outsized share (accession 0001437749-26-006113). Layer on the AI surge, and a large and growing slice of revenue now depends on a handful of hyperscale data-center customers whose capital spending moves in waves. The same Enterprise Data line that is up 98% is the line most exposed to an AI-capex digestion phase, and semiconductor demand is cyclical even at the best franchises, with the filing warning of "changes in general demand for electronic products in the end markets that we serve" (accession 0001437749-26-006113).
The valuation gives none of this any room. At $1,563.49 the price sits at the very top of the semiconductor peer distribution, well beyond the upper quartile, paying about 98x operating income for a duration assumption only about 13% of comparable fast-growers have sustained for a decade. Every static method is a fraction of the price: Earnings Power Value at $95, FCF yield at $154, relative valuation at $700. The bear case does not require the AI story to be wrong. It requires only that growth fade a few years sooner than 29 years, or that a China or capex shock land, for a price built on near-perpetual execution to reprice sharply.
Valuation
The valuation is a study in how far a price can run ahead of the static methods. At $1,563.49 the market pays about 98x company-wide operating income, which inverts into operating growth held near its self-funding ceiling for roughly 29 years, computed at a 14.7% cost of capital where each additional point of growth moves the implied horizon about 3.8 years. The recent pace is within what Monolithic Power has delivered, so the stretch is in the duration, not the rate. The multiple sits at the very top of the peer distribution, and only about 13% of comparable fast-growers have sustained this for a decade, so the reverse solve labels the assumption high.
The X-ray families split cleanly along the growth line. Only the forward-growth methods approach the price: DCF Exit Multiple at $1,456 (which holds today's near-93x EV/EBITDA roughly flat) and Discounted Future Market Cap at $786. Every other family is far below: the asset methods near $149 to $208, the earnings-power methods near $95 to $154, and the relative methods near $89 to $700.
The reverse-DCF reasonable-growth band lands at roughly $147 to $197 with a base near $176, and its reliability is flagged low precisely because a name growing this fast off a high base is hard to bound. That gap, between a normalized band in the low hundreds and a price near sixteen hundred, is the entire AI-durability premium. It is internally coherent: a debt-free, high-margin franchise with a real secular tailwind can justify a premium multiple. At 98x operating income the price is a concentrated bet that the AI power-content cycle compounds for far longer than precedent supports.
Catalysts
The Q1 2026 print and Q2 guidance, reported in 2026, are the load-bearing catalysts: revenue up 26% to $804 million, adjusted EPS up 26% to $5.10, both beats, and Q2 revenue guided to a $900 million midpoint, roughly 11% above prior Street consensus. The driver was Enterprise Data, up about 98% year over year to nearly a third of revenue, with management raising the Enterprise Data growth floor to around 85% and optical-module demand pushing Communications up 33% sequentially (Simply Wall St; Sahm Capital; Finsee).
Analyst sentiment moved sharply higher after the print, with price targets lifted to averages around $1,800 and highs near $2,000, and roughly 80% of covering analysts at Buy (Kavout; TIKR). The swing factors into the next prints are the durability of AI server power demand and backlog visibility, hyperscaler capital-spending cadence, any sign of an AI-capex digestion phase, and the macro and policy backdrop, including China-related supply and currency exposure and tariff or export-control developments. With the price built on long-duration growth, guidance revisions in either direction will carry outsized weight.
Sources: Monolithic Power Q1 2026 results and Q2 guidance (Simply Wall St; Sahm Capital; Finsee, 2026); Kavout and TIKR analyst-target coverage (2026).
Peer Cohorts (Per Segment, With Filing Citations)
Semiconductor-based power electronics (single reportable segment) (reported)
- VICR (VICOR CORPORATION)
- (no filing in the citation store)
- AEIS (ADVANCED ENERGY INDUSTRIES INC)
- (no filing in the citation store)
- ADI (ANALOG DEVICES INC)
- (no filing in the citation store)
- SMTC (SEMTECH CORP)
- (no filing in the citation store)
- MTSI (MACOM Technology Solutions Holdings, Inc.)
- (no filing in the citation store)
- DIOD (DIODES INC /DEL/)
- (no filing in the citation store)
- ALGM (ALLEGRO MICROSYSTEMS, INC.)
- (no filing in the citation store)
- MRVL (MARVELL TECHNOLOGY, INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.