Power Integrations Inc (POWI) stock analysis

P/E below its 5-year median

Power Integrations's P/E of 55.9 is below its own 5-year median of 73.3.

P/E above the industry

Power Integrations's P/E of 55.9 is above the Electronic Components and Accessories median of 34.1.

EV/EBITDA below its 5-year median

Power Integrations's EV/EBITDA of 57.0 is below its 5-year median of 78.7.

P/B above the industry

Power Integrations's price-to-book of 3.54 is above the Electronic Components and Accessories median of 3.21.

Trading above fair value

The share price of $44.18 is above our fair value estimate of $33.61.

Margin of safety under 20%

The price is 31.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -12.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -48.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 149% over the last twelve months, against a 5-year average of -20.9% a year.

Growing slower than the industry

Revenue grew 2.3% over the last twelve months; the Electronic Components and Accessories median is 17.6%.

Guidance issued

The latest outlook (fourth quarter of 2026 Revenue, Nov 4, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 53.9% over the last twelve months, against 54.8% a year earlier.

Return on equity under 15%

Return on equity was 6.5% over the last twelve months and averaged 10.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 8.6%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Power Integrations's return on equity of 6.5% is above the Electronic Components and Accessories median of 5.0%.

Earnings shrank over 5 years

Net income shrank 20.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 9.8% over the last twelve months, against a 5-year average of 15.0%.

Net margin above the industry

Power Integrations's net margin of 9.8% is above the Electronic Components and Accessories median of 3.0%.

No debt

Power Integrations has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 7.88 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 18.65; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Power Integrations paid dividends worth 1.9% of the share price over the last twelve months.

Yield below Treasuries

The 1.9% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Power Integrations yields 1.9%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 106% of net income, leaving little room.

Covered by free cash flow

Dividends take 51.9% of free cash flow.