Wall Street Thinks Monolithic Power Stock Is Worth 50% More. Here’s the Catch.

Monolothic Power Systems's NTM price-to-normalized-earnings multiple has compressed to 38.01x, below its own two-year average of 48.33x, even after Q2 revenue rose 47.6% year over year to a record $980.6 million and management guided Q3 above consensus.

Wall Street hasn't followed the stock down. The mean 12-month price target has climbed to $1,839.80 with 13 buy and 3 outperform ratings and zero sells, pushing the target-to-price ratio to 151.1%, the widest gap in over a year of tracked data.

Free cash flow margin fell to 14.84% in the quarter ended June 30, 2026, down from 22.31% the prior quarter, even as revenue hit a record, suggesting the company's capacity build-out, including a new GlobalFoundries Singapore fab partnership, is pressuring near-term cash conversion.

Two directors and an EVP disclosed multiple stock sales over the summer, including a $16.28 million sale by EVP Maurice Sciammas in mid-July, while the stock traded within reach of its year-to-date high.

Monolithic Power Stock Has Lost Its Post-Earnings Premium

Monolithic Power Systems (MPWR) closed at $1,217.80 on September 18, 2026. That's a real gain from a year earlier, but it's also well off the level the stock traded near right after its Q2 2026 print, and it sits alongside a multiple that has come down hard.

The stock's NTM price-to-normalized-earnings ratio peaked at 75.65x earlier this year and now sits at 38.01x, below its own trailing two-year mean of 48.33x.

That compression is happening against one of the stronger operating quarters in the company's history. Q2 revenue hit a record $980.6 million, up 21.9% sequentially and 47.6% year over year, with GAAP net income rising 90.6% and adjusted EPS of $6.50 beating the $5.87 estimate. Management didn't hedge the outlook either. Q3 guidance of $1.14 billion to $1.16 billion came in well above the Street's prior estimate of roughly $981.9 million, the board added $500 million to buyback authorization for a total of $1 billion, and the company kept its quarterly dividend at $2.00 per share into Q3.

In early September, MPS also signed a long-term manufacturing agreement with GlobalFoundries to deploy its power process technology at a 300mm Singapore fab, aimed at diversifying supply and supporting new 800-volt data center products. None of that reads like a company whose valuation should be shrinking toward its own historical floor.

Wall Street Hasn't Backed Off the Bull Case

If the market were simply repricing MPWR for a genuine growth slowdown, the sell side would likely be trimming targets alongside it. It hasn't.