Will Higher Revenues Boost Monolithic Power's Q1 Earnings?

Monolithic Power Systems, Inc. MPWR is set to release first-quarter 2025 results on May 1, after the closing bell. In the last reported quarter, adjusted earnings were $4.09 per share.

This Kirkland, WA-based company is likely to have recorded higher revenues in the to-be-reported quarter, driven by solid traction in several verticals. Management’s effort to expand and diversify its product portfolio is a positive factor. 

Factors at Play

Monolithic Power projects e-commerce as the upcoming growth driver. The company is actively developing an e-commerce platform that will allow customers to input their specific requirements. Leveraging AI software, Monolithic Power aims to predict product performance based on customer needs, delivering an Amazon-like consumer experience. This initiative is expected to not only expand the customer base but also enable rapid penetration into the small and medium-sized business market.

The company is well-positioned for continued expansion, supported by its robust product portfolio targeting in-car connectivity and infotainment, advanced driver assistance systems, and the rapid adoption of LED lighting in vehicles. The rising demand for analog integrated circuits and sensors is a tailwind for semiconductor component providers like Monolithic Power. 

Management has indicated that the company is capturing a growing share of dollar content in the automotive market. In addition, Monolithic Power’s strong, long-standing partnerships with leading auto suppliers are expected to further drive top-line growth in the upcoming quarter. 
   
Product innovation, integration of state-of-the-art technologies and a strong focus on quality and operational efficiency are driving design wins across several verticals. These factors are expected to have boosted the top line in the first quarter. 

Overall Expectations

The Zacks Consensus Estimate for revenues from the Enterprise Data vertical is pegged at $131.33 million, implying a decline from $194.87 million in the year-ago quarter. The Zacks Consensus Estimate for net sales in the Communication segment is pegged at $73.27 million, suggesting growth from $63.81 million in the year-ago quarter.
 
Contribution from the consumer vertical is expected to be $58.92 million, implying growth from $57.31 million reported in the year-ago quarter. The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $42.16 million, suggesting an improvement from the $40.83 million reported in the prior-year quarter.
 
Revenues from the storage and computing vertical are expected to be $177.57 million, indicating growth from the prior-year quarter’s tally of $136.51 million. Net sales from the automotive vertical are pegged at $148.34 million, indicating an increase from $128.34 million reported in the year-ago quarter.

For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $632.18 million, suggesting an increase from $457.89 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $4.00, implying growth from $2.81 reported in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Monolithic Power this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $4 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 

Monolithic Power Systems, Inc. Price and EPS Surprise

Monolithic Power Systems, Inc. price-eps-surprise | Monolithic Power Systems, Inc. Quote

Zacks Rank: Monolithic Power has a Zacks Rank #3.

Stocks to Consider

Qorvo QRVO is set to release quarterly numbers on April 29. It has an Earnings ESP of +3.42% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

QUALCOMM Incorporated QCOM is set to release quarterly numbers on April 29. It has an Earnings ESP of +0.86% and carries a Zacks Rank #2.

CGI Group GIB is set to release quarterly numbers on April 30. It has an Earnings ESP of +0.89% and carries a Zacks Rank #2

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This article originally published on Zacks Investment Research (zacks.com).

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