This is a step-by-step stock review to answer the question, is Power Integrations (POWI) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Power Integrations (POWI) stock a good buy?
- Power Integrations Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Power Integrations (POWI) stock a good buy?
1.Power Integrations (POWI) Company History
- Founded in 1988: Power Integrations was established to revolutionize power conversion with cutting-edge semiconductor technologies.
- Pioneering Innovation: Introduced the industry’s first high-voltage integrated circuits (ICs) for power conversion, setting new standards for efficiency and compactness.
- IPO in 1997: The company went public, accelerating its growth and expanding its market reach globally.
- Expanding Portfolio: Over the years, Power Integrations diversified its product line, including AC-DC, LED lighting, and motor-drive ICs, driving advancements in energy-efficient electronics.
- Environmental Impact: Committed to sustainability, their products have helped reduce billions of tons of CO2 emissions by enabling more energy-efficient devices.
- Global Leader: Power Integrations is now a leader in high-voltage ICs, serving a wide range of industries including consumer electronics, industrial, and automotive.
- Continuous Growth: The company continues to innovate with new technologies like GaN-based power ICs, ensuring its leadership in the evolving power electronics market.
- Headquartered in Silicon Valley: Power Integrations is based in San Jose, California, with a global presence in key markets around the world.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Overpriced
- Score: 28
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Power Integrations makes money:
- Integrated Circuits (ICs) Sales: Power Integrations earns money by selling high-voltage ICs used in power conversion for various electronics like chargers, adapters, and appliances.
- Energy-Efficient Solutions: The company profits by providing ICs that help manufacturers create energy-efficient products, reducing power consumption in devices.
- LED Lighting: Power Integrations generates revenue from ICs used in LED lighting, a growing market due to demand for energy-efficient lighting solutions.
- Motor-Drive Applications: The company sells ICs for motor-control systems used in appliances, fans, and industrial equipment, contributing to its income.
- Licensing and Royalties: Power Integrations earns money by licensing its technology to other companies and receiving royalties on their sales.
- Automotive Applications: The company is expanding into the automotive sector, providing ICs for electric vehicles and charging stations, a growing source of revenue.
Here are a few of the other companies that Power Integrations has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Voyan Technology
- Qspeed Semiconductor
- BCD Semiconductor Manufacturing Limited
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Power Integrations stacks up against other companies.
- NVIDIA Corporation.(NVDA) – 100
- Nova Ltd.(NVMI) – 78
- Monolithic Power Systems, Inc.(MPWR) – 78
- Aehr Test Systems.(AEHR) – 72
- Tower Semiconductor Ltd.(TSEM) – 72
- Power Integrations, Inc.(POWI) – 28
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Revenue Growth: Balu Balakrishnan led Power Integrations to significant revenue growth, reflecting the company’s strong market position and successful product offerings.
- Product Innovation: Under his leadership, Power Integrations introduced several groundbreaking products, including advancements in high-voltage ICs and energy-efficient solutions.
- Strategic Acquisitions: Balakrishnan guided the company through strategic acquisitions like Qspeed Semiconductor and BCD Semiconductor, expanding its technology base and market reach.
- Sustainability Initiatives: He emphasized sustainable practices, leading to the development of products that help reduce energy consumption and environmental impact.
- Global Market Expansion: Balakrishnan played a key role in expanding Power Integrations’ presence in international markets, increasing the company’s global footprint and customer base.
- Strong Financial Performance: His leadership resulted in improved financial performance, with increased profitability and strong stock performance, reflecting the company’s overall success.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Power Integrations (POWI) is 44/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Power Integrations (POWI) stock a good buy?
Some of the top questions investors can have is Power Integrations (POWI) stock a good buy or should I buy Power Integrations (POWI) stock?
Power Integrations is a strong investment due to its leadership in high-voltage semiconductor technology, essential for energy-efficient electronics. The company excels in innovation, frequently introducing cutting-edge products that enhance power conversion and efficiency. With a solid track record of revenue growth and strategic acquisitions, including key companies like Qspeed Semiconductor, Power Integrations has expanded its market presence and technology base. Its commitment to sustainability and reducing energy consumption aligns with global trends towards greener technologies, boosting long-term growth potential. Additionally, Power Integrations has a strong financial performance, reflected in robust profitability and stock performance. However, potential investors should consider the risks associated with market competition and technological changes. Overall, Power Integrations offers a compelling investment opportunity with its innovative products and strong market position in the energy-efficient technology sector.
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To truly know if Power Integrations is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.