News Flash: Analysts Just Made A Captivating Upgrade To Their Monolithic Power Systems, Inc. (NASDAQ:MPWR) Forecasts

Monolithic Power Systems, Inc. (NASDAQ:MPWR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The revenue forecast for next year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market seems to be pricing in some improvement in the business too, with the stock up 6.3% over the past week, closing at US$1,212. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

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Following the upgrade, the latest consensus from Monolithic Power Systems' 16 analysts is for revenues of US$6.4b in 2027, which would reflect a sizeable 72% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 66% to US$30.41. Before this latest update, the analysts had been forecasting revenues of US$5.3b and earnings per share (EPS) of US$30.41 in 2027. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for Monolithic Power Systems

It may not be a surprise to see that the analysts have reconfirmed their price target of US$1,823, implying that the uplift in sales is not expected to greatly contribute to Monolithic Power Systems's valuation in the near term.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Monolithic Power Systems' growth to accelerate, with the forecast 54% annualised growth to the end of 2027 ranking favourably alongside historical growth of 20% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 26% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Monolithic Power Systems to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Monolithic Power Systems.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Monolithic Power Systems analysts - going out to 2028, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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