Monolithic Power Systems is the IBD Stock Of The Day as the chipmaker drives higher after its beat-and-raise earnings report. MPWR stock is approaching a buy point.
Late Monday, the Kirkland, Wash.-based company trounced analyst estimates for the second quarter and pointed higher for the current period. It earned an adjusted $3.25 a share on sales of $461 million in the June quarter. On a year-over-year basis, Monolithic's earnings surged 80% while sales increased 57%.
It marked the third straight quarter of accelerating sales and earnings growth for the company.
For the current quarter, Monolithic forecast revenue of $480 million to $500 million. The midpoint of $490 million was well above Wall Street's target of $458 million. In the year-earlier period, Monolithic generated sales of $323.5 million.
MPWR Stock In Consolidation Pattern
Monolithic Power Systems makes semiconductor-based electronics power control systems.
In afternoon trading on the stock market today, MPWR stock rose 0.9% to close at 530.96.
MPWR stock has been consolidating for the past 37 weeks with a buy point of 580.10, according to IBD MarketSmith charts. However, if it pulls back in the days ahead, it could form a handle, which would give it an earlier entry point, based on IBD trading guidelines.
In a positive move, the relative strength line for MPWR stock has been hitting new highs as it outperforms the S&P 500 index. The action is highlighted with a blue dot on daily and weekly MarketSmith charts.
Monolithic Is Top Fabless Chipmaker
Cowen analyst Matthew Ramsay calls MPWR stock a top pick, given its "large greenfield growth opportunities" in end markets such as data centers and electric vehicles.
In a note to clients on Monday, he reiterated his outperform rating on MPWR stock and raised his price target to 600 from 550.
MPWR stock is on the IBD 50 list of top-performing growth stocks. Monolithic ranks first out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup.
MPWR stock has a best-possible IBD Composite Rating of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
