POWER INTEGRATIONS INC (POWI) Stock Fundamental Analysis
NASDAQ:POWI - Nasdaq - US7392761034 - Common Stock - Currency: USD
POWI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 110 industry peers in the Semiconductors & Semiconductor Equipment industry. POWI is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. POWI is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
POWI had positive earnings in the past year.
POWI had a positive operating cash flow in the past year.
POWI had positive earnings in each of the past 5 years.
POWI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
POWI has a Return On Assets (4.55%) which is comparable to the rest of the industry.
POWI has a Return On Equity of 5.04%. This is comparable to the rest of the industry: POWI outperforms 55.45% of its industry peers.
POWI's Return On Invested Capital of 2.51% is in line compared to the rest of the industry. POWI outperforms 53.64% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for POWI is below the industry average of 10.54%.
The 3 year average ROIC (7.88%) for POWI is well above the current ROIC(2.51%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.55% | ||
| ROE | 5.04% | ||
| ROIC | 2.51% |
ROA(3y)10.34%
ROA(5y)11.02%
ROE(3y)11.45%
ROE(5y)12.23%
ROIC(3y)7.88%
ROIC(5y)8.99%
1.3 Margins
POWI has a Profit Margin of 8.56%. This is in the better half of the industry: POWI outperforms 61.82% of its industry peers.
In the last couple of years the Profit Margin of POWI has declined.
POWI has a Operating Margin of 5.59%. This is comparable to the rest of the industry: POWI outperforms 54.55% of its industry peers.
POWI's Operating Margin has declined in the last couple of years.
The Gross Margin of POWI (54.34%) is better than 72.73% of its industry peers.
In the last couple of years the Gross Margin of POWI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.59% | ||
| PM (TTM) | 8.56% | ||
| GM | 54.34% |
OM growth 3Y-44.4%
OM growth 5Y-17.81%
PM growth 3Y-30.96%
PM growth 5Y-30.07%
GM growth 3Y1.52%
GM growth 5Y1.13%
2. Health
2.1 Basic Checks
POWI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, POWI has about the same amount of shares outstanding.
The number of shares outstanding for POWI has been reduced compared to 5 years ago.
POWI has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 26.07 indicates that POWI is not in any danger for bankruptcy at the moment.
POWI has a Altman-Z score of 26.07. This is amongst the best in the industry. POWI outperforms 92.73% of its industry peers.
There is no outstanding debt for POWI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 26.07 |
ROIC/WACC0.22
WACC11.26%
2.3 Liquidity
POWI has a Current Ratio of 9.10. This indicates that POWI is financially healthy and has no problem in meeting its short term obligations.
POWI has a better Current ratio (9.10) than 94.55% of its industry peers.
A Quick Ratio of 6.02 indicates that POWI has no problem at all paying its short term obligations.
POWI has a better Quick ratio (6.02) than 89.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 9.1 | ||
| Quick Ratio | 6.02 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.74% over the past year.
POWI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.03% yearly.
Looking at the last year, POWI shows a small growth in Revenue. The Revenue has grown by 0.68% in the last year.
POWI shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.08% yearly.
EPS 1Y (TTM)5.74%
EPS 3Y-29.14%
EPS 5Y-2.03%
EPS Q2Q%72.22%
Revenue 1Y (TTM)0.68%
Revenue growth 3Y-15.86%
Revenue growth 5Y-0.08%
Sales Q2Q%15.1%
3.2 Future
Based on estimates for the next years, POWI will show a very strong growth in Earnings Per Share. The EPS will grow by 27.37% on average per year.
Based on estimates for the next years, POWI will show a quite strong growth in Revenue. The Revenue will grow by 15.11% on average per year.
EPS Next Y37%
EPS Next 2Y32.75%
EPS Next 3Y27.37%
EPS Next 5YN/A
Revenue Next Year13.78%
Revenue Next 2Y14.94%
Revenue Next 3Y15.11%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 42.43, the valuation of POWI can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of POWI is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 26.52, POWI is valued quite expensively.
With a Price/Forward Earnings ratio of 26.78, POWI can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of POWI is on the same level as its industry peers.
POWI's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.25.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.43 | ||
| Fwd PE | 26.78 |
4.2 Price Multiples
POWI's Enterprise Value to EBITDA is on the same level as the industry average.
63.64% of the companies in the same industry are more expensive than POWI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.21 | ||
| EV/EBITDA | 44.82 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
POWI's earnings are expected to grow with 27.37% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)N/A
EPS Next 2Y32.75%
EPS Next 3Y27.37%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.56%, POWI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.62, POWI pays a better dividend. On top of this POWI pays more dividend than 84.55% of the companies listed in the same industry.
POWI's Dividend Yield is slightly below the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.56% |
5.2 History
On average, the dividend of POWI grows each year by 18.21%, which is quite nice.
POWI has been paying a dividend for at least 10 years, so it has a reliable track record.
POWI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)18.21%
Div Incr Years12
Div Non Decr Years16
5.3 Sustainability
125.74% of the earnings are spent on dividend by POWI. This is not a sustainable payout ratio.
The dividend of POWI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP125.74%
EPS Next 2Y32.75%
EPS Next 3Y27.37%
54.74
+0.98 (+1.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners103.31%
Inst Owner Change1.85%
Ins Owners1.38%
Ins Owner Change3.99%
Market Cap3.08B
Analysts81.82
Price Target70.18 (28.21%)
Short Float %6.53%
Short Ratio5.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.56% |
Yearly Dividend0.81
Dividend Growth(5Y)18.21%
DP125.74%
Div Incr Years12
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.79%
Min EPS beat(2)6.56%
Max EPS beat(2)7.01%
EPS beat(4)4
Avg EPS beat(4)6.85%
Min EPS beat(4)4.91%
Max EPS beat(4)8.93%
EPS beat(8)7
Avg EPS beat(8)14.44%
EPS beat(12)9
Avg EPS beat(12)10%
EPS beat(16)13
Avg EPS beat(16)9.28%
Revenue beat(2)0
Avg Revenue beat(2)-1.84%
Min Revenue beat(2)-1.86%
Max Revenue beat(2)-1.82%
Revenue beat(4)0
Avg Revenue beat(4)-1.41%
Min Revenue beat(4)-1.86%
Max Revenue beat(4)-0.89%
Revenue beat(8)0
Avg Revenue beat(8)-1.91%
Revenue beat(12)0
Avg Revenue beat(12)-2.38%
Revenue beat(16)1
Avg Revenue beat(16)-1.85%
PT rev (1m)-3.91%
PT rev (3m)-11.79%
EPS NQ rev (1m)-3.35%
EPS NQ rev (3m)-3.35%
EPS NY rev (1m)-0.51%
EPS NY rev (3m)-0.51%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.43 | ||
| Fwd PE | 26.78 | ||
| P/S | 7.12 | ||
| P/FCF | 42.21 | ||
| P/OCF | 33.62 | ||
| P/B | 4.19 | ||
| P/tB | 4.87 | ||
| EV/EBITDA | 44.82 |
EPS(TTM)1.29
EY2.36%
EPS(NY)2.04
Fwd EY3.73%
FCF(TTM)1.3
FCFY2.37%
OCF(TTM)1.63
OCFY2.97%
SpS7.69
BVpS13.07
TBVpS11.24
PEG (NY)1.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.55% | ||
| ROE | 5.04% | ||
| ROCE | 3.18% | ||
| ROIC | 2.51% | ||
| ROICexc | 4.06% | ||
| ROICexgc | 5.2% | ||
| OM | 5.59% | ||
| PM (TTM) | 8.56% | ||
| GM | 54.34% | ||
| FCFM | 16.86% |
ROA(3y)10.34%
ROA(5y)11.02%
ROE(3y)11.45%
ROE(5y)12.23%
ROIC(3y)7.88%
ROIC(5y)8.99%
ROICexc(3y)14.11%
ROICexc(5y)18.03%
ROICexgc(3y)18.24%
ROICexgc(5y)23.71%
ROCE(3y)9.98%
ROCE(5y)11.38%
ROICexcg growth 3Y-55.85%
ROICexcg growth 5Y-25.1%
ROICexc growth 3Y-55.34%
ROICexc growth 5Y-23.04%
OM growth 3Y-44.4%
OM growth 5Y-17.81%
PM growth 3Y-30.96%
PM growth 5Y-30.07%
GM growth 3Y1.52%
GM growth 5Y1.13%
F-Score6
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 56.96% | ||
| Cap/Sales | 4.31% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 160.95% | ||
| Profit Quality | 196.91% | ||
| Current Ratio | 9.1 | ||
| Quick Ratio | 6.02 | ||
| Altman-Z | 26.07 |
F-Score6
WACC11.26%
ROIC/WACC0.22
Cap/Depr(3y)70.32%
Cap/Depr(5y)119.47%
Cap/Sales(3y)4.95%
Cap/Sales(5y)7.21%
Profit Quality(3y)127.26%
Profit Quality(5y)114.14%
High Growth Momentum
Growth
EPS 1Y (TTM)5.74%
EPS 3Y-29.14%
EPS 5Y-2.03%
EPS Q2Q%72.22%
EPS Next Y37%
EPS Next 2Y32.75%
EPS Next 3Y27.37%
EPS Next 5YN/A
Revenue 1Y (TTM)0.68%
Revenue growth 3Y-15.86%
Revenue growth 5Y-0.08%
Sales Q2Q%15.1%
Revenue Next Year13.78%
Revenue Next 2Y14.94%
Revenue Next 3Y15.11%
Revenue Next 5YN/A
EBIT growth 1Y-18.65%
EBIT growth 3Y-53.22%
EBIT growth 5Y-17.88%
EBIT Next Year82.16%
EBIT Next 3Y31.38%
EBIT Next 5YN/A
FCF growth 1Y-43.28%
FCF growth 3Y-29.66%
FCF growth 5Y-20.36%
OCF growth 1Y-41.73%
OCF growth 3Y-29.42%
OCF growth 5Y-18.41%