Monolithic Power Stock Faces Valuation Compression Despite Strong Earnings and Bullish Analyst Targets
Despite a record Q2 revenue increase to $980.6 million, up 47.6% year-over-year, Monolithic Power Systems (MPWR) has seen its NTM price-to-earnings multiple fall from 75.65x earlier this year to 38.01x as of September 2026 — below its two-year average of 48.33x. The stock closed at $1,217.80 on September 18 and has lost some post-earnings momentum despite strong financial performance including a 90.6% rise in GAAP net income. Analysts remain bullish: the mean 12-month price target is now $1,839.80 with all ratings being positive (13 buys and 3 outperform), resulting in a wide target-to-price ratio of 151.1%. This suggests strong conviction from Wall Street despite valuation compression. However, there are signs of caution: free cash flow margin dropped to 14.84% for Q2 compared to the prior quarter’s 22.31%, and insiders including EVP Maurice Sciammas sold $16.28 million in shares during July.
Tickers: $MPWR
Topics: earnings performance free cash flow Monolithic Power Systems price targets stock valuation