Even in the somewhat rarefied air of semiconductor sector valuations, Power Integrations (POWI) stands out trading at close to 48x 2021 EPS estimates - not as high as NVIDIA (NVDA), but still on the upper end of the sector. Of course, not many semiconductor companies have a line of sight to possibly multiple years of double-digit revenue growth and meaningful margin expansion, as well as a tough-to-beat moat in vital semiconductor sub-sector (power conversion).
I'm bullish on Power Integrations' near-term opportunities in rapid charging, mid-term opportunities in areas like industrial automation, brushless motors, and electrification, and mid-to-long-term opportunities like auto electrification, not to mention specialty areas like gallium nitride (GaN chips). Still, it's tough to make the numbers work, as today's valuation already appears to anticipate mid-teens long-term revenue growth and meaningful margin expansion.
Read more here:
Power Integrations Reaping The Benefits Of Sound Management Decisions
No comments:
Post a Comment