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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Power Integrations, Inc. (XNAS:POWI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
POWI
Name:
POWER INTEGRATIONS, INC. (XNAS:POWI)
Sector:
59.90M
Industry:
Semiconductors
CEO:
Mr. Balu Balakrishnan
Total Employees:
773
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 20.97% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF POWER INTEGRATIONS, INC.(POWI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
69.01
One Month Price Target:
$69.44
Six Month Price Target :
$71.58
Likely Price in One Year's Time:
Ticker:
$74.16
Likely Trading Range Today Under (Normal Volatility)
$68.73
Price Upper limit ($) :
$69.43
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$64.85
This week:
$59.72
This month :
$50.42
Other Primary facts
Market Cap:
3.96B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
57.18M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.88%
-11.77%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$88.28
$79.36
$49.74
$58.66
Medium risk (<10%) entry points
Buy Call
Sell Call
$76.46
Buy Put:
Sell Put:
$74.55
$61.54
$63.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
POWI
Sharpe Ratio:
3.17%
Comparison:
POWI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 2.46% higher than the industry
& ratio is 39.18% higher than the market/S&P 500 average
Average Returns/Yield of
POWI
Daily returns:
0.10%
Weekly returns:
0.52%
Monthly returns:
2.07%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -22.26% below industry average
Classification:
POWI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.53
Statistical test of Returns:
POWI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.98%
Weekly Volatility:
6.67%
Monthly Volatility:
13.34%
Yearly Volatility:
46.21%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.31%
Volatility in last five trading days has been -22.66% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.02%
Weekly VaR:
-13.47%
Monthly VaR:
-26.93%
How Much Can the price of
POWI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-93.30%
This translates to price declining to:
$53.39
This translates to price declining to:
$4.62
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
POWI is a 90.10% riskier investment compared to the market/S&P 500 & is 62.86% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.95% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
POWI
Beta in relation to market/S&P 500--1.11
Expected beta in 1 year's time:
0.678
Expected beta in 3 year's time:
0.958
Unlevered (debt free) Beta:
1.007
Beta in relation to Nasdaq (XNAS):
0.765
Beta in relation to all global stocks::
0.867
Beta Comparison & Analysis
Beta of competitors/peers::
1.196
Beta is -7.17% lower than peers
Average Industry Beta:
1.41
Beta is -21.27% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.88%
Sustainable growth rate is -46.18% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.141
Alpha is -26.42% below industry average alpha yield
Alpha is 896% higher than market/& is unsustainably high
Analysis of Cost of Capital of
POWI
Equity cost of capital:
0.108
Equity cost of capital is -16.04% below industry mean WACC
Unlevered (without debt) cost of capital:
9.75%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$12.45
Revenue growth rate per share of (3Y):
4.81
Annual revenue growth rate is 121.07% above the industry average
EPS:
$2.80
Expected Annual growth rate of EPS (3Y):
-6.86%
Expected future EPS growth rate is -113.17% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$3.55
Balance sheet equity growth per share: 69.12%
Equity growth rate per share is 388.19% higher than the industry
Debt per share
$0.00
EBITDA per share
$3.89
Valuation Analysis Today of
POWI
P/E Ratio:
22.45
P/E Ratio of Competitors/Peers:
35.01
P/E ratio is -35.88% lower than main peers & is -45.87% lower than the industry
Stock price/value with industry average P/E ratio: $116.13
POWI is -40.58% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $20.37
Present value of the expected future dividends only: $7.14
P/S (Price to Sales ratio):
5.54
Price to sales ratio is -31.78% below the industry mean
P/B (Price to book value ratio):
4.81
Price to free cash flow: 19.46
Price to free cash flow ratio is -51.73% lower than the industry
Net income growth rate (3Y):
129.42%
Net income growth rate is -325.93% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.24%
Dividend yeild: 0.93%
Previous Dividend: $0.18
Previous adjusted dividend: $0.18
Previous Dividend: $0.64
Expected next dividend best case: $0.21
Expected next dividend worst case: $0.15
Average dividend payment (long-term): $0.16
Average dividend increase/decrease (growth rate) % per period: 1.65%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 29/08/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 31/05/2022
-
Dividend History:
2022-05-27--$0.18
2021-11-29--$0.15
2021-05-27--$0.13
2022-02-25--$0.18
2021-08-30--$0.13
2021-02-25--$0.13
Dividend growth rate is -37.85% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
11.23%
Net debt to equity ratio:
-20.79%
Debt to assets ratio:
10.10%
Net debt to assets ratio:
-18.56%
Debt-to-asset ratio is -74.09% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
0.00%
-
-
Analysis of Key Statistics
Correlation of price movement with the market:
0.476
Statistical significance of correlation:
POWI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is -24.05% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
-0.04
Covariance of price movement with the market:
-0.07
Kurtosis
6.491
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.737
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
POWI
Gross Profit Margin Ratio:
212%
Operating Profit Margin Ratio:
26.12%
Operating profit margin is 11.03% higher than the industry
Net Profit Margin Ratio:
212%
Effective Tax Rate:
8.61%
Effective tax rate is -42.97% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.82%
Return on equity (ROE) is -27.18% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
18.59%
Return on assets (ROA) is 41.21% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
8.56
Current ratio is 110.73% above industry average
Cash Conversion Cycle (days):
1
Cash conversion cycle is -98.22% below industry average
The remaining useful life of property plant & equipment is: 0.2 years
Stock based compensation to net income ratio:
5.27%
In-depth Efficiency Analysis
Revenue generated per employee:
920.7K
Each employee generates 49% more revenue than industry average revenue per employee
EBITDA generated per employee:
287.9K
Each employee generates 24% more EBITDA than industry average revenue per employee
Profit generated per employee:
221.0K
Each employee generates 37% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
77.5K
Each employee generates 179% more free cash flow than industry average revenue per employee
Assets/Capital per employee
422.6K
Each employee generates 179% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 3.94%
Growth rate in R&D investment/expenditure is -72.15% lower than the industry
Competitors/Peer firms of
POWI
Agora, Inc. (XNAS:API)
CHINDATA GROUP HOLDINGS LIMITED (XNAS:CD)
VARONIS SYSTEMS, INC. (XNAS:VRNS)
AMKOR TECHNOLOGY, INC. (XNAS:AMKR)
CRICUT, INC. (XNAS:CRCT)
ACV AUCTIONS INC. (XNAS:ACVA)
Rackspace Technology, Inc. (XNAS:RXT)
CMC MATERIALS, INC. (XNAS:CCMP)
The Descartes Systems Group Inc. (XNAS:DSGX)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
711.69M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
334.79M
376.90M
88.58M
39.38M
102.22M
62.84M
181.00K
190.98M
-
-
35.60M
222.55M
185.92M
170.86M
186.95M
16.09M
170.86M
Statement of Cash Flow
Date:
Period:
9.13M
Differed Income Tax :
- 936.00K
Stock Based Compensation :
9.01M
Change in Working Capital :
10.13M
Accounts Receivables:
10.66M
Other Working Capital:
75.00K
Other Non-Cash Items:
1.01M
Net Cash Provided by Operating Activities:
74.60M
Investments in PP&E:
- 14700.00K
Net Acquisitions:
-
Purchases of Investments:
- 15121.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
170.62M
273.42M
444.04M
30.66M
103.12M
14.69M
592.50M
180.07M
91.85M
8.29M
-
17.37M
29.11M
326.69M
-
919.20M
36.18M
-
5.60M
-
33.06M
69.23M
-
29.39M
29.39M
-
98.62M
26.00K
789.03M
- 8169.0K
-
March 31, 2022 at 6:00:00 AM
525.77M
820.57M
919.20M
-
-
- 170624.0K
108.82M
1.20M
80.20M
-
-
- 134689.00K
- 10656.00K
3.06M
- 142288.00K
-
12.51M
170.62M
158.12M
74.60M
- 14700.00K
59.90M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
POWI
2023
2024
2025
2026
2027
$83.81
$90.07
$96.78
$104.01
$111.77