MPWR Should I Buy
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Monolithic Power Systems Inc (MPWR) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong revenue growth and positive analyst sentiment, the technical indicators and options data suggest caution. Additionally, the significant insider selling and weak net income trends further weigh against immediate investment.
The MACD is negative and expanding, indicating bearish momentum. RSI is neutral at 49.518, showing no clear signal. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but the stock is trading below the pivot level of 1172.857, with key support at 1115.557 and resistance at 1230.157. The stock has a 70% chance to decline by -10.75% in the next day and -14% in the next week, suggesting near-term downside risk.
Analysts have consistently raised price targets, with the latest targets ranging from $1,300 to $1,500, citing strong Q4 results and positive guidance.
The company raised its quarterly dividend by 28.2%, signaling confidence in its cash flow.
Hedge funds have significantly increased their buying activity (+145.95% last quarter).
Insiders are selling heavily, with a 6204.48% increase in selling activity over the last month.
The stock has a high probability of near-term decline based on candlestick pattern analysis.
Options data reflects bearish sentiment with a high put-call volume ratio.
Net income and EPS have dropped significantly in the latest quarter (-88.26% and -88.42% YoY, respectively).
In Q4 2025, revenue grew by 20.83% YoY to $751.16 million, but net income and EPS dropped significantly by -88.26% and -88.42% YoY, respectively. Gross margin slightly declined to 55.15% (-0.45% YoY). While revenue growth is strong, profitability metrics have weakened considerably.
Analysts are bullish on MPWR, with multiple firms raising price targets recently. KeyBanc raised its target to $1,500, citing strong Q4 results and guidance. Other firms have targets ranging from $1,300 to $1,396, reflecting confidence in the company's growth prospects, particularly in AI and enterprise data markets.
