MPWR
Monolithic Power Systems, Inc.
$1,283.32
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 296.0% above fair value
You pay
$1,283.32
Bear
$211.32
Fair
$324.05
Bull
$452.63
Bear
$211.32
-83.5%
10% stage 1 growth, 12% discount
Fair
$324.05
-74.7%
16% stage 1 growth, 12% discount
Bull
$452.63
-64.7%
21% stage 1 growth, 12% discount
Adjust Assumptions
16.2%
12.0%
3.0%
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
39%
Implied Market Multiple
124.8x
Market is pricing in (growth)
35.9%
vs 16.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$1852.57
Divergence from AlphaVal
83%
Summary
Using a two-stage FCF DCF with 16% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $324.05 per share.
Warnings
Stock-based employee pay equals 37% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $1852.57 (from 25 analysts). Our estimate is 83% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions