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Power Integrations (POWI)
:POWI
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Power Integrations
(NASDAQ:POWI)
58Neutral
Positive Factors
GaN Adoption
GaN adoption is accelerating, with strong demand across the portfolio, particularly for its new 1700V solution.
Growth Opportunities
The company is well positioned for growth across its key end markets, all guided to grow.
Negative Factors
Disappointing Outlook
The outlook is disappointing, driven entirely by the appliance market on enthusiastic customer inventory builds, anticipating stimulus actions in China to spur demand.
Weak Demand in Appliances
Looking ahead to 4Q, management called out weaker demand in appliances, further impacted by the inventory buildup of appliances at Chinese OEMs ahead of China’s consumer incentive program.
Power Integrations (POWI) vs. S&P 500 (SPY)
Market Cap
$2.87B
Dividend Yield1.61%
Average Volume (3M)561.91K
Price to Earnings (P/E)89.5
Beta (1Y)1.74
Revenue Growth-5.75%
EPS Growth-41.75%
CountryUS
Employees865
SectorTechnology
Sector Strength44
IndustrySemiconductors
Share Statistics
EPS (TTM)0.56
Shares Outstanding56,847,070
10 Day Avg. Volume426,874
30 Day Avg. Volume561,911
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.46
Price to Cash Flow (P/CF)53.00
P/FCF Ratio66.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$81.25Price Target Upside60.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Power Integrations Business Overview & Revenue Model
Company DescriptionPower Integrations, Inc. designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide. The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems. It also offers high-voltage diodes; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles. In addition, the company provides motor-driver ICs for use in refrigerator compressors, ceiling fans, and air purifiers, as well as pumps, fans, and blowers used in consumer appliances, such as dishwashers and laundry machines. It serves communications, computer, consumer, and industrial markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales force, as well as a network of independent sales representatives and distributors. Power Integrations, Inc. was incorporated in 1988 and is headquartered in San Jose, California.
How the Company Makes MoneyPower Integrations generates revenue primarily through the sale of its proprietary integrated circuits and related components, which are essential in various power conversion applications. The company's key revenue streams include the consumer electronics sector, where its products are used in devices such as smartphones, appliances, and LED lighting. Additionally, the industrial sector contributes significantly to its earnings, with applications in motor controls and power supplies. Power Integrations also benefits from strategic partnerships with electronics manufacturers and technology firms that integrate its solutions into their products, thereby expanding its market reach and driving sales growth. Innovative product development and a strong patent portfolio further reinforce its competitive edge and financial performance.
Power Integrations Financial Statement Overview
Summary
Power Integrations exhibits a strong balance sheet with no debt and high equity levels, indicating financial health. However, the decline in revenue and profitability poses challenges. Cash flow remains solid, but negative free cash flow growth could limit expansion opportunities.Income Statement
The income statement shows a decline in total revenue from $651 million in 2022 to $419 million in 2024, indicating a negative revenue growth trend. The gross profit margin for 2024 is approximately 53.6%, which is relatively healthy for the industry. However, the net profit margin dropped from 26.3% in 2022 to 7.7% in 2024, reflecting reduced profitability. EBIT and EBITDA margins also decreased significantly, suggesting operational challenges and reduced earnings efficiency.70
Positive
Balance Sheet
The balance sheet remains strong with a debt-free position in 2024, enhancing financial stability. The equity ratio is high at approximately 90.5%, indicating a solid capital structure with low leverage. Return on equity has declined from 22.6% in 2022 to 4.3% in 2024, highlighting a decrease in shareholder returns. Overall, the company's balance sheet demonstrates financial resilience despite pressures on profitability.80
Positive
Cash Flow
Cash flow metrics indicate a mixed performance. Operating cash flow increased from $65.8 million in 2023 to $81.2 million in 2024, showing improved cash generation from operations. Free cash flow to net income ratio is robust, suggesting effective cash conversion. However, free cash flow growth has been negative when compared to the previous periods, which could impact future investment capabilities. The operating cash flow to net income ratio is strong, indicating efficient cash management despite declining net income.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 418.97M | 444.54M | 651.14M | 703.28M | 488.32M | Gross Profit |
| 224.75M | 228.96M | 366.91M | 360.64M | 243.59M | EBIT |
| 17.93M | 35.06M | 180.41M | 175.06M | 70.49M | EBITDA |
| 17.93M | 72.44M | 217.76M | 210.01M | 98.59M | Net Income Common Stockholders |
| 32.23M | 55.73M | 170.85M | 164.41M | 71.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 300.00M | 311.57M | 353.81M | 530.35M | 449.19M | Total Assets |
| 828.83M | 819.87M | 840.10M | 1.01B | 903.34M | Total Debt |
| 0.00 | 9.98M | 8.73M | 11.42M | 10.03M | Net Debt |
| -50.97M | -53.95M | -96.65M | -146.70M | -248.85M | Total Liabilities |
| 79.05M | 67.63M | 84.88M | 102.45M | 92.93M | Stockholders Equity |
| 749.77M | 752.24M | 755.22M | 912.03M | 810.41M |
| Cash Flow | Free Cash Flow | |||
| 63.90M | 44.88M | 176.13M | 183.60M | 55.04M | Operating Cash Flow |
| 81.18M | 65.76M | 215.34M | 230.87M | 125.64M | Investing Cash Flow |
| -25.92M | -14.15M | 78.34M | -232.80M | -28.27M | Financing Cash Flow |
| -68.22M | -93.05M | -346.42M | -98.83M | -17.19M |
Power Integrations Technical Analysis
Negative
50.50
Price Trends
59.40
Negative
61.24
Negative
63.38
Negative
Market Momentum
-2.09
Positive
30.39
Neutral
9.48
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POWI, the sentiment is Negative. The current price of 50.5 is below the 20-day moving average (MA) of 56.59, below the 50-day MA of 59.40, and below the 200-day MA of 63.38, indicating a bearish trend. The MACD of -2.09 indicates Positive momentum. The RSI at 30.39 is Neutral, neither overbought nor oversold. The STOCH value of 9.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for POWI.
Power Integrations Risk Analysis
Power Integrations disclosed 26 risk factors in its most recent earnings report. Power Integrations reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Power Integrations Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $26.19B | 85.88 | 4.71% | 3.73% | -44.31% | -86.74% | |
67 Neutral | $48.19B | 19.32 | 28.16% | 2.13% | -4.99% | -9.18% | |
67 Neutral | $17.25B | 11.27 | 18.97% | ― | -14.19% | -27.42% | |
64 Neutral | $2.01B | 45.62 | 2.49% | ― | -21.10% | -80.81% | |
58 Neutral | $2.87B | 89.51 | 4.29% | 1.61% | -5.75% | -41.75% | |
57 Neutral | $20.97B | 10.32 | -14.01% | 2.49% | 4.46% | -23.38% | |
53 Neutral | $3.67B | ― | -16.69% | ― | -25.29% | -449.44% |
* Technology Sector Average
Performance Comparison
POWI
Power Integrations
50.50
-19.30
-27.65%
DIOD
Diodes
43.17
-27.37
-38.80%
MCHP
Microchip
48.41
-39.15
-44.71%
NXPI
NXP Semiconductors
190.06
-51.96
-21.47%
ON
ON Semiconductor
40.69
-33.16
-44.90%
SLAB
Silicon Laboratories
112.57
-29.41
-20.71%
Power Integrations Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -16.58% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with strong growth in several key segments and promising future prospects, particularly with GaN technology and expansion in India. However, the company faced significant challenges in the communications segment and inventory management, leading to a balanced view of the company's current position.Highlights
Revenue Growth in Key Segments
Revenues were up 18% year over year to $105 million, with consumer up more than 35%, computer more than 10%, and industrial up about 3%. Despite an overall decline for the year, these segments showed strong growth.
Successful GaN Adoption and Industry Recognition
GaN-based products are expected to grow at a high rate and exceed 10% of sales. The 1700-volt Innomax 2 ICs received multiple industry awards, highlighting the company's leadership in GaN technology.
Expansion in India
Power Integrations has expanded its presence in India, securing significant shares in metering and fixed wireless rollouts, and supplying gate drivers for electric locomotives.
Positive Outlook for 2025
The company expects revenue growth in all four segments, driven by industrial growth due to infrastructure projects and increasing demand in air conditioning and TV markets.
Lowlights
Significant Revenue Decline in Communications
The communications category fell more than 60% following the exit from the China OEM cell phone business. This decline significantly impacted overall revenue performance.
Q4 Sequential Revenue Decrease
Revenues were down 9% sequentially in Q4. Consumer revenues were down mid-teens sequentially, and industrial revenues were down 10%, largely driven by the timing of shipments for metering applications.
Inventory Challenges
Inventory days rose to 315 at quarter-end, up 24 days from the prior quarter, reflecting the sequentially lower revenues. Inventory remains well above target levels.
Company Guidance
During the Power Integrations, Inc. Q4 earnings call, guidance for 2025 indicated expectations of sustained revenue growth across all segments, with a notable emphasis on the industrial sector, which is projected to lead growth driven by infrastructure projects such as high voltage DC transmission, renewables, and electric locomotives. The company expects Q1 revenue to be flat sequentially, with a full-year gross margin of around 55.5%. There is an anticipated 15% year-over-year revenue increase for Q1. Key growth drivers include the adoption of GaN technology, anticipated to exceed 10% of sales, and increased market presence in India. The automotive sector is also expected to grow rapidly from a modest base, further supported by new design wins and expansions into markets outside of China.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.