Stock Analysis | Monolithic Power Outlook - Technical Deterioration Overshadows Mixed Fundamentals

Market Snapshot

Headline Takeaway: Monolithic Power (MPWR) is showing mixed signals: the fundamentals remain solid, but technical indicators are weakening — internal diagnostic scores for fundamentals are stronger than for technicals.

Shares of Monolithic Power have risen by 5.83% in recent trading, bucking the bearish technical trend. While analysts remain somewhat divided in their outlooks, the company's cash flow and operating performance have shown growth. However, technical signals are flashing red, warning of a potential pullback.

News Highlights

• Global Supply Chain Shifts: New McKinsey research highlighted the impact of U.S. tariff policies on the semiconductor sector. While this is not specific to MPWR, supply chain volatility could affect Monolithic Power's logistics and pricing strategies in the long run.
• Green Semiconductor Innovation: A recent article noted that Cadence is leading efforts to make semiconductor manufacturing more sustainable. Monolithic Power, as a player in power management, could benefit from growing demand for energy-efficient solutions, especially in AI and data center infrastructure.
• Japan-U.S. Collaboration: Japan is proposing greater cooperation with the U.S. in rare earths and semiconductors, which could help reduce dependency on China. If successful, such partnerships may create long-term growth opportunities for MPWR and other semiconductor companies.

Analyst Views & Fundamentals

Average Analyst Rating: The simple average of recent analyst ratings is 4.10 (on a scale where 1 = Underperform and 5 = Strong Buy). However, the performance-weighted average, which accounts for historical accuracy, is lower at 3.71, indicating that analysts with strong track records are more cautious.

Rating Consistency: Analysts are not in complete agreement. Ratings include "Strong Buy," "Buy," and "Neutral," reflecting a range of views. The current price trend is positive (5.83% rise), and the weighted analyst expectations align with this upward movement, suggesting a cautiously optimistic outlook.

Fundamental Highlights:

• Net Profit YoY Growth Rate: 38.68% (internal diagnostic score: 5.68)
• Operating Cash Flow YoY Growth Rate: 26.99% (internal diagnostic score: 5.68)
• Net Profit Attributable to Parent Company Shareholders / Net Profit: 100.00% (internal diagnostic score: 5.68)
• Total Profit YoY Growth Rate: 53.17% (internal diagnostic score: 5.68)
• Cash-UP: -9.57% (internal diagnostic score: 5.68)
• CFOA (Cash Flow Operating Activities): 5.98% (internal diagnostic score: 5.68)
• Interest Coverage Ratio: -89.94% (internal diagnostic score: 5.68) — a very negative number, indicating weak ability to cover interest expenses.

Money-Flow Trends

Large-scale institutional money continues to influence MPWR’s market dynamics:

• Overall Inflow Ratio: 49.06% — moderate inflow activity.
• Small-Trend Inflows: -49.64% — retail investors are pulling back.
• Large-Trend Inflows: +51.51% — institutional investors are showing cautious optimism.
• Extra-Large Inflow Ratio: 47.98% — consistent but not aggressive.
• Block Inflow Ratio: 48.87% — indicating that large investors are maintaining some level of exposure.

With a fund flow score of 7.49 (internal diagnostic score), it appears that money is being strategically deployed, with large players showing more confidence than retail investors.

Key Technical Signals

Technical analysis is currently bearish. The internal technical score is 3.42 — a weak signal. The key indicators include:

• Williams %R Overbought: Score: 2.44 (internal diagnostic) — neutral but volatile.
• MACD Death Cross: Score: 1.00 (internal diagnostic) — strongly bearish.
• Bearish Engulfing: Score: 6.83 (internal diagnostic) — surprisingly bullish.

Recent Chart Patterns:

• 2025-08-21: MACD Death Cross — a classic bearish reversal signal.
• 2025-08-13 & 2025-08-14: WR Overbought — suggests short-term exhaustion and possible reversal.
• 2025-08-15: Bearish Engulfing — a bullish reversal pattern.

Despite the Bearish Engulfing signal, bearish indicators currently dominate (2 vs 0). Momentum is weak and uncertain, and the overall trend is “weak” with a recommendation to “avoid” the stock.

Conclusion

Monolithic Power is in a tight spot. While fundamentals look solid and institutional investors are cautiously optimistic, technical indicators are flashing bearish signals. The internal technical score (3.42) is significantly weaker than the fundamental score (5.68), suggesting that the market may soon correct.

Actionable Takeaway: Consider waiting for a pull-back before committing to a new position in MPWR. Monitor key price levels and keep an eye on upcoming analyst upgrades or downgrades. Given the mixed signals and technical weakness, patience may be the best strategy here.