Monolithic Power Systems, Inc. reports 52.5% EBITDA growth in 2020 and 34.5% Revenue growth
02/04/2021 • About Monolithic Power Systems, Inc. (
$MPWR) • By InTwits
Monolithic Power Systems, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Monolithic Power Systems, Inc. is a fast growth stock: 2020 revenue growth was 34.5%, 5 year revenue CAGR was 20.5% at 2020 ROIC 17.8%
- Monolithic Power Systems, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 5.4%. Average EBITDA Margin for the same period was 20.4%
- Monolithic Power Systems, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.9%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: $59m in 2020, $96m in 2019, $23m in 2018, $66m in 2017, $37m in 2016
- The company has highly profitable business model: ROIC is 17.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Monolithic Power Systems, Inc.'s Revenue surged on 34.5%. Revenue growth showed acceleration in 20Q4 - it increased 39.8% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.6 pp from 19.1% to 21.6% in 2020.
Gross Margin showed almost no change in 2020. SG&A as a % of Revenue decreased on 2.1 pp from 21.3% to 19.1% in 2020.
Net Income margin increased on 2.1 pp from 17.3% to 19.5% in 2020. Net Income margin grew at 1.5 pp per annum in 2016-2020.
Investments (CAPEX, working capital and M&A)
Monolithic Power Systems, Inc.'s CAPEX/Revenue was 7.0% in 2020. The company showed decline in CAPEX/Revenue of 7.0 pp from 14.0% in 2017 to 7.0% in 2020. Average CAPEX/Revenue for the last three years was 8.7%.
Return on investment
The company operates at good ROIC (17.8%) and ROE (18.9%). ROIC increased on 3.7 pp from 14.0% to 17.8% in 2020. ROE increased on 3.5 pp from 15.4% to 18.9% in 2020.
Leverage (Debt)
Debt level is -1.8x Net Debt / EBITDA and 0.0x Debt / EBITDA. Debt surged on 31.5% while cash jumped on 93.7%.
Monolithic Power Systems, Inc. has no short term refinancing risk: cash is higher than short term debt (19,784.1%).
Valuation and dividends
Monolithic Power Systems, Inc.'s trades at EV/EBITDA 93.0x and P/E 105.3x.
Management team
Monolithic Power Systems, Inc.'s CEO Michael R Hsing has spent 23 years with the company. The company's CFO Theodore Blegen "Bernie" has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2020
Monolithic Power Systems, Inc. ($MPWR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 388.7 | 470.9 | 582.4 | 627.9 | 844.5 | 34.5% |
| Gross Profit | 210.9 | 258.3 | 322.7 | 346.3 | 466.0 | 34.5% |
| SG&A | 83.0 | 97.3 | 113.8 | 133.5 | 161.7 | 21.1% |
| EBITDA | 70.1 | 95.5 | 127.2 | 119.7 | 182.5 | 52.5% |
| EBIT | 54.4 | 77.4 | 113.5 | | | |
| Tax | 4.5 | 17.7 | 13.2 | | | |
| Net Income | 52.7 | 65.2 | 105.3 | 108.8 | 164.4 | 51.0% |
| Stock Based Compensation | 43.5 | 52.6 | 60.6 | | | |
Balance Sheet
|
|---|
| Cash | 112.7 | 82.8 | 172.7 | 173.0 | 334.9 | 93.7% |
| Accounts Receivable | 34.2 | 38.0 | 55.2 | | | |
| Inventory | 71.5 | 99.3 | 136.4 | | | |
| Accounts Payable | 17.4 | 22.8 | 22.7 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 1.3 | 1.7 | 35.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 1.1 | 1.4 | 27.5% |
Cash flow
|
|---|
| Capex | 37.1 | 65.8 | 22.5 | 95.8 | 59.0 | -38.5% |
| Dividends | 33.0 | 34.0 | 47.0 | | | |
Ratios
|
|---|
| Revenue growth | 16.7% | 21.2% | 23.7% | 7.8% | 34.5% | |
| EBITDA growth | 26.5% | 36.2% | 33.1% | -5.9% | 52.5% | |
|
|---|
| Gross Margin | 54.3% | 54.8% | 55.4% | 55.2% | 55.2% | 0.0% |
| EBITDA Margin | 18.0% | 20.3% | 21.8% | 19.1% | 21.6% | 2.6% |
| EBIT Margin | 14.0% | 16.4% | 19.5% | | |
| SG&A, % of revenue | 21.4% | 20.7% | 19.5% | 21.3% | 19.1% | -2.1% |
| SBC, % of revenue | 11.2% | 11.2% | 10.4% | | |
| Net Income Margin | 13.6% | 13.8% | 18.1% | 17.3% | 19.5% | 2.1% |
| CAPEX, % of revenue | 9.5% | 14.0% | 3.9% | 15.3% | 7.0% | -8.3% |
|
|---|
| ROIC | 13.5% | 15.9% | 18.8% | 14.0% | 17.8% | 3.7% |
| ROE | 13.2% | 13.7% | 18.1% | 15.4% | 18.9% | 3.5% |
| Net Debt/EBITDA | -1.6x | -0.9x | -1.4x | -1.4x | -1.8x | -0.4x |
People
|
|---|
| Insider ownership | 6.9% | 6.9% | 6.9% | | | |
| Employees | 1,400 | 1,500 | 1,700 | | | |
| Revenue/Employee, th. $ | 278 | 314 | 343 | | | |
Monolithic Power Systems, Inc. ($MPWR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 166 | 186 | 259 | 233 | | 17.3% | 23.3% | 53.7% | 39.8% |
| EBITDA | 36 | 33 | 66 | 47 | | 42.4% | 37.7% | 92.3% | 31.4% |
| Net Income | 36 | 30 | 56 | 43 | | 36.6% | 45.8% | 88.2% | 32.2% |
Balance Sheet
|
|---|
| Cash | 155 | 156 | 179 | 335 | | -14.8% | -20.6% | -12.6% | 93.7% |
| Short Term Debt | 1 | 2 | 1 | 2 | | -1.6% | 39.7% | 5.5% | 35.0% |
| Long Term Debt | 1 | 2 | 2 | 1 | | 9.0% | 112.4% | 43.1% | 27.5% |
Ratios
|
|---|
| Gross Margin | 55.2% | 55.1% | 55.1% | 55.3% | | -0.0% | -0.0% | -0.0% | 0.2% |
| EBITDA Margin | 21.8% | 18.0% | 25.5% | 20.1% | | 3.9% | 1.9% | 5.1% | -1.3% |
| Net Income Margin | 21.6% | 16.2% | 21.4% | 18.4% | | 3.0% | 2.5% | 3.9% | -1.1% |
Peers in Semiconductors
Below we provide Monolithic Power Systems, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.4% | -3.2% | 1.0% |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | - | 21.2% | 23.7% | 7.8% | 34.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | 54.3% | 54.8% | 55.4% | 55.2% | 55.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | 18.0% | 20.3% | 21.8% | 19.1% | 21.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.4% | 3.7% | 3.6% |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | 9.5% | 14.0% | 3.9% | 15.3% | 7.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.3% |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | 13.5% | 15.9% | 18.8% | 14.0% | 17.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.5x |
|---|
| Monolithic Power Systems, Inc. ($MPWR) | -1.6x | -0.9x | -1.4x | -1.4x | -1.8x |
