Oppenheimer analyst Rick Schafer reiterated the Outperform score on Monolithic Energy Techniques, Inc. MPWR, reducing the worth goal of $500 from $565.
The corporate will report its outcomes after the market closes on Monday, October 30.
The analyst sees in-line 3Q/4Q outcomes/outlook led by relative power in AI and auto.
Auto (24%) anticipated flattish in 3Q and 4Q, reflecting two delayed buyer launches.
Auto continues to be anticipated to be up 40% this 12 months after doubling in 2022. Schafer expects order velocity to select up in 1H24.
Schafer has ’23 topline modeled up 1% to $1.8 billion because the broader cyclical correction weighs, with bigger analog friends like TI monitoring down >10% this 12 months.
The analyst estimates AI servers up >30% this 12 months, accounting for 15% of server volumes.
MPS AI module options (~5x ASP multiplier) will make up 10% of gross sales this 12 months, and 15% subsequent, the analyst provides. Industrial seemingly stay gentle by 4Q.
Based on the analyst, a deep product pipeline and regular circulate of design wins have steadily diversified MPWR away from conventional shopper merchandise and into the communications, industrial, automotive, and networking markets.
The transition to BCD4 and BCD5 buoys gross margins and offers MPWR a sustainable value benefit over the competitors, the analyst notes.
MPWR units up effectively to outperform the broader semiconductor market with each an bettering margin profile and an accelerating topline outlook.
The analyst’s CY23/ CY24E EPS of $11.69/$13.93 stay unchanged. Schafer launched CY25E EPS of $16.67.
Value Motion: MPWR shares are buying and selling greater by 0.52% to $406.16 on the final verify Friday.
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