QS Research · Michael Burry's Scion Capital analyst template · 2006
MONOLITHIC POWER SYSTEMS, INC. (MPWR)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -20% · upside +10%
I use section 13's TTM to Sep 30 2026 revenue base of $3.74B for all three cases. At today's 15.24x EV/Sales, $56.96B EV plus $1.09B cash over 48.77M shares is about the $1,190.44 price, so the base case is 0%; a 20% revenue haircut at the same multiple gives about $46.69B equity, or roughly $957/share (-20%), and a 10% revenue uplift gives about $63.79B equity, or roughly $1,308/share (+10%). The market is not missing the growth — it is paying 48.8x EV/EBITDA, 65.0x P/E and a 1.0% FCF yield for it, so record Q3 and Q4 guidance are real but already priced. The restatement, CFO transition and Rosen investigation are real overhangs that may explain part of the drawdown, but they do not make the operating numbers cheap; this is interesting but not yet a long or short.
Key numbers
- Share price: $1,190.44
- Market cap: $58.06B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $3.74B
- EV / EBITDA (TTM): 48.8x
- P/E (TTM): 65.0x
- Price / book: 15.55x
The 15 boxes
- ✓ 1. Long-form business notes
MPWR is a fabless analog/mixed-signal power semiconductor company incorporated in 1997; it sells primarily through distributors, with 92% of FY2025 revenue from Asia, and its FY2025 end-market mix is led by storage and computing (26.3%) and enterprise data (25.2%). From FY2023 to FY2025 revenue rose from $1.82B to $2.79B, operating income from $481.7M to $728.6M, and operating cash flow to $838.2M, while capex rose to $172.0M. Between the FY2020 and FY2025 10-Ks the disclosed end-market taxonomy changed (enterprise data separated, AI systems called out), automotive rose to 21.2% from 12.9%, consumer fell to 9.1% from 26.1%, employees rose to over 4,500 from over 2,200, and patents/applications rose to 2,231 from 1,327.
- ✓ 2. Competitive advantage
MPWR shows a real but engineering-based moat, not a scale or network one: gross margin held at 55-56% and operating margin at 24-26% across FY2023-FY2025 while revenue compounded from $1.82B to $2.79B, and the 10-K claims its ICs are smaller, more integrated and more energy-efficient than most competitors' parts, backed by proprietary process and packaging technology installed inside its foundry partners' fabs and 2,231 patents/applications as of 2025-12-31. It competes head-on with ten named analog/power houses (TI, Analog Devices, Infineon, ON Semiconductor, STMicroelectronics and others) in an industry the 10-K says has decreasing ASPs over product life. The weak side is bargaining power outside the company: three distributors were 54% of FY2025 revenue and 92% of FY2025 revenue came from Asia. Earnings quality needs care: FY2024 net income of $1.59B is roughly 3x that year's operating income of $539.4M, so operating income, not net income, is the evidence of the moat.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) was MPWR's first billion-dollar quarter: revenue $1,202.4M, up 63.1% YoY and 22.6% QoQ, led by enterprise data ($506.7M, 42.1% of revenue, +164.6% YoY) and communications (+134.7% YoY), while storage & computing fell 3.8% sequentially and consumer fell 11.6% YoY. GAAP gross margin edged up to 55.4% and GAAP operating income was $357.7M (29.8% of revenue); GAAP net income was $271.1M ($5.51 diluted) with a 26.1% effective tax rate versus 12.6% a year ago on 2025 federal tax-law adjustments. Inventory rose to $764.9M but days of inventory fell 10 days to 130 (117 on next-quarter revenue), cash plus short-term investments fell to $1,091.2M after $453.4M of Q3 buybacks, and Q4 guidance is $1,315-1,385M of revenue at 55.2-55.8% GAAP gross margin.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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