Power Integrations, Inc. (POWI)
Valuation Overview•Is Power Integrations, Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 54/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
POWI demonstrates adequate business quality with stable profitability. This is backed by a fortress balance sheet, holding significant net cash ($59M) and minimal debt risk.
The company is facing top-line contraction (-12.0% 3Y CAGR) however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 5.7%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $108.3M | +5.9% | -12.0% | -1.9% | +2.6% | |
| EBITDA | $12.8M | — | -39.0% | — | — | |
| Net Income | $3.3M | -31.5% | -49.4% | — | -5.6% | |
| EPS (Diluted) | $0.06 | -30.4% | -48.9% | -19.7% | -5.1% | |
| Free Cash Flow | $18.0M | +36.4% | -20.9% | +9.6% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 53.9% | 53.2% | 53.5% | 51.8% |
| Operating Margin | 5.7% | 5.7% | 13.9% | 17.5% |
| Net Margin | 3.7% | 8.4% | 15.0% | 17.1% |
| FCF Margin | 18.9% | 15.0% | 19.6% | 20.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.23 | $0.25 | +8.7% | ||
| Q1'26 | $0.19 | $0.23 | +21.1% | ||
| Q4'25 | $0.34 | $0.36 | +5.9% | ||
| Q3'25 | $0.34 | $0.35 | +2.9% | ||
| Q2'25 | $0.28 | $0.31 | +10.7% | ||
| Q1'25 | $0.28 | $0.30 | +7.1% | ||
| Q4'24 | $0.36 | $0.40 | +11.1% | ||
| Q3'24 | $0.26 | $0.28 | +7.7% |
Total return is +62.8% (1Y), outperforming the benchmark by +37.8%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +134.7% | +125.4% | — |
| 1Y | +62.8% | +37.8% | +1.6% |
| 3YCAGR | -0.1% | -22.0% | +2.8% |
| 5YCAGR | +2.9% | -12.0% | +4.9% |
| 10YCAGR | +13.3% | -1.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Power Integrations, Inc. (POWI) valuation, health, and returns.
Power Integrations, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -33.4% downside from DCF intrinsic value of $58.01)
Power Integrations, Inc. has multiple valuation anchors: DCF Intrinsic Value: $58.01 | Peer Relative Fair Value: $117.48 | Wall Street Analyst Target: $90.00 (implying +3.3% upside). A convergence of these signals offers higher conviction.
Power Integrations, Inc. displays fair financial health with a composite quality score of 54/100, supported by a Altman Z-Score of 31.8 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 2.4%.
Power Integrations, Inc. pays a 1.0% dividend yield, covered by a 214% payout ratio with 13 years of growth, supplemented by a 2.0% buyback yield.
Power Integrations, Inc.'s current growth trajectory is Accelerating. The company achieved +5.9% 1Y revenue growth and -30.4% 1Y EPS growth, compared to its 3Y revenue CAGR of -12.0%.
Wall Street consensus is Buy based on 16 analysts, beating EPS expectations in 92% of recent quarters with a 10-quarter streak. The consensus price target represents a +3.3% change from current levels.
Investment risks for Power Integrations, Inc. include: -48.1% 1-year max drawdown, high beta (2.18x market volatility), stretched payout ratio. Volatility risk is characterized by a beta of 2.18x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.