DCF Studio

    MPWR · NMS · Technology

    Monolithic Power Systems, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 859.88

    Market price

    USD 1243.95

    Implied upside

    -30.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 5.0% of revenue against depreciation of 2.0%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 76.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 859.88-30.9%
    Exit multiple
    USD 1691.12+35.9%
    Market price
    USD 1243.95

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 4.2bnUSD 6.3bnUSD 9.0bnUSD 12.5bnUSD 16.5bnUSD 20.8bnUSD 25.1bnUSD 28.7bnUSD 31.1bnUSD 31.9bn+25.3%
    EBITUSD 1.1bnUSD 1.7bnUSD 2.4bnUSD 3.3bnUSD 4.4bnUSD 5.5bnUSD 6.7bnUSD 7.6bnUSD 8.3bnUSD 8.5bn+25.3%
    NOPATUSD 928.0mUSD 1.4bnUSD 2.0bnUSD 2.8bnUSD 3.7bnUSD 4.6bnUSD 5.6bnUSD 6.4bnUSD 6.9bnUSD 7.1bn+25.3%
    Add depreciation & amortisationUSD 81.7mUSD 122.5mUSD 176.5mUSD 243.8mUSD 322.3mUSD 406.9mUSD 489.6mUSD 560.0mUSD 607.2mUSD 622.4m+25.3%
    Less capital expenditureUSD -210.9mUSD -315.8mUSD -454.3mUSD -626.4mUSD -826.7mUSD -1.0bnUSD -1.3bnUSD -1.4bnUSD -1.5bnUSD -1.6bn+25.1%
    Capex, % of revenue5.0%5.0%5.0%5.0%5.0%5.0%5.0%5.0%5.0%5.0%-
    Less increase in working capitalUSD -362.3mUSD -543.4mUSD -718.3mUSD -895.4mUSD -1.0bnUSD -1.1bnUSD -1.1bnUSD -936.3mUSD -628.6mUSD -202.0m-6.3%
    Free cashflow to firmUSD 436.5mUSD 655.3mUSD 1.0bnUSD 1.5bnUSD 2.1bnUSD 2.9bnUSD 3.7bnUSD 4.6bnUSD 5.3bnUSD 5.9bn+33.6%
    Discount factor0.94840.85310.76730.69020.62080.55840.50220.45170.40630.3655-
    Present valueUSD 414.0mUSD 559.0mUSD 774.4mUSD 1.0bnUSD 1.3bnUSD 1.6bnUSD 1.9bnUSD 2.1bnUSD 2.2bnUSD 2.2bn-
    Present Value Of The ForecastUSD 13.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.486Reported 1.725, pulled toward 1.0 (Blume)
    Cost of equity11.18%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 60.7bn100.0% of capital
    Total debtUSD 20.0m0.0% of capital, book value as a proxy
    Tax rate16.6%Effective, capped at statutory
    WACC11.18%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 859.88

    65% of EV

    Forecast FCFF, final year
    USD 5.9bn
    Capex at depreciation, working capital in reinvestment
    USD 7.1bn
    Less reinvestment at g/ROIC (13.6% of NOPAT)
    USD -960.7m
    Capitalised
    USD 6.1bn
    ROIC (reported)
    18.4%
    Terminal value, undiscounted
    USD 72.2bn
    Terminal value, discounted
    USD 26.4bn
    Enterprise value
    USD 40.3bn
    Less net debt
    USD -1.2bn
    Equity value
    USD 41.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 1691.12

    83% of EV

    Terminal value, undiscounted
    USD 182.0bn
    Terminal value, discounted
    USD 66.5bn
    Enterprise value
    USD 80.5bn
    Less net debt
    USD -1.2bn
    Equity value
    USD 81.7bn

    Spread between methods: 65%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.18%1137.231162.361192.231227.971271.13
    10.18%972.30986.471003.281023.271047.15
    11.18%843.50850.94859.89870.63883.51
    12.18%740.54743.73747.80752.91759.22
    13.18%656.65657.12658.11659.70661.98

    Outlined: this model. Green text: above today's price of 1243.95. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year15.9%27.6%33.0%
    EBIT margin29.4%26.6%37.3%
    Discount rate-11.2%8.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.