Deutsche Bank Remains Convinced In Buy Rating On Monolithic Power

Monolithic Power Systems, Inc. MPWR can maintain its above-industry growth profile in 2016 and beyond, with the potential for sustainable margin expansion still intact, according to a note from Deutsche Bank.

"The co's solid execution and diversified growth drivers should continue yielding appreciable above-market growth, a trajectory all the more compelling in light of Analog's low-single-digit market growth (+15% y/y in 1Q vs peers' roughly flat)," analyst Ross Seymore wrote in a note.

The company's first quarter EPS of $0.45 beat estimates by a penny and revenue was $84.5 million, higher than the consensus estimate of $83 million. Monolithic guided second quarter revenue of $91-$95 million versus the $91.5 million estimate.

Seymore, who rates the stock at Buy, said the company's second quarter outlook implies EPS of roughly $0.47-$0.60, with midpoint of about $0.54 versus Street's $0.53 estimate. The company also guided proforma gross margin of 54.6 - 55.6 percent.

The analyst cut his second quarter EPS estimate by $0.02 to $0.56. Seymore also trimmed his 2016 revenue/EPS view to $384.2 million/$2.30 from $385.4 million/$2.35. Street expects earnings of $2.26 a share on revenue of $380.56 million for the full year.

Shares of Monolithic Power rose 1.64 percent to $64.55, while Seymore raised the price target by $5 to $75.