A Look At Power Integrations (POWI) Valuation After Mixed Results Cost Cuts And Leadership Changes
Power Integrations (POWI) has been in focus after a cluster of updates, including mixed quarterly results, new revenue guidance, a 7% workforce reduction, a board reshuffle and an upcoming dividend payment.
See our latest analysis for Power Integrations.
Those mixed earnings, new revenue guidance, workforce reduction and board changes come after a sharp 48.54% 90 day share price return and a 23.14% year to date share price return, set against a 27.44% 1 year total shareholder return decline. This suggests momentum has picked up recently, while longer term holders have had a tougher ride.
If this mix of cost cuts and board moves has you thinking more broadly about semiconductor opportunities tied to electrification and AI infrastructure, it could be worth scanning 34 AI infrastructure stocks as a starting point for other ideas.
With shares up sharply in the last quarter, mixed earnings, a workforce cut and a higher dividend, the key question now is simple: is Power Integrations still undervalued, or is the market already pricing in any future growth?
Most Popular Narrative: 9.9% Undervalued
Power Integrations' most followed narrative pegs fair value at $51, a premium to the recent $45.93 close, which puts its recent share price surge into sharper context.
Ongoing product innovation, especially the integration of digital control and development of disruptive, system-level ICs/modules, enables further market share gains, design wins, and higher-margin business as demand shifts toward energy-efficient solutions in appliances, metering, and industrial automation, positively impacting overall earnings and net margins.
Want to see what is behind that confidence in higher margins and revenue power? One key assumption quietly reshapes earnings, valuation, and the required return. The full narrative connects those moving parts in a way the headline numbers alone do not.
Result: Fair Value of $51 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are clear pressure points you need to keep in mind, including tariffs weighing on appliance demand and the risk that big EV or AI design wins take longer to materialize.
Find out about the key risks to this Power Integrations narrative.
Another Angle: Rich Earnings Multiple Raises the Bar
That $51 fair value from the narrative sits alongside a very different signal from the current P/E. Power Integrations trades on 115.4x earnings, well above the US Semiconductor industry at 42.3x, peers at 49x, and a fair ratio of 49.8x. This points to valuation risk rather than a clear cushion. If growth or margins do not match expectations, how much room is really left for disappointment?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
After weighing the upbeat narrative against a rich P/E and mixed recent news, are you comfortable with how it all fits together, or do you want to check the numbers yourself and move fast to shape your own view by looking at 1 key reward and 4 important warning signs?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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