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1. Company Snapshot

1.a. Company Description

Power Integrations, Inc.designs, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs), and other electronic components and circuitry used in high-voltage power conversion worldwide.The company provides a range of alternating current to direct current power conversion products that address power supply ranging from less than one watt of output to approximately 500 watts of output for mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, LED lighting, and various other consumer and industrial applications, as well as power conversion in high-power applications comprising industrial motors, solar and wind-power systems, electric vehicles, and high-voltage DC transmission systems.


It also offers high-voltage diodes; high-voltage gate-driver products used to operate high-voltage switches, such as insulated-gate bipolar transistors and silicon-carbide MOSFETs under the SCALE and SCALE-2 product-family names; and SCALE-iDriver for use in powertrain and charging applications for electric vehicles.In addition, the company provides motor-driver ICs for use in refrigerator compressors, ceiling fans, and air purifiers, as well as pumps, fans, and blowers used in consumer appliances, such as dishwashers and laundry machines.It serves communications, computer, consumer, and industrial markets.


The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales force, as well as a network of independent sales representatives and distributors.Power Integrations, Inc.was incorporated in 1988 and is headquartered in San Jose, California.

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1.b. Last Insights on POWI

Power Integrations' recent performance was positively driven by its Q4 earnings beat, with quarterly earnings of $0.23 per share surpassing the Zacks Consensus Estimate of $0.19 per share. The company has also seen increased institutional investor interest, with Copeland Capital Management LLC and SG Americas Securities LLC raising their positions. Additionally, Power Integrations has made strategic appointments, including Chris Jacobs as senior vice president for marketing and product strategy, and Nancy Erba as chief financial officer.

1.c. Company Highlights

2. Power Integrations' Q4 Results In Line with Expectations, Growth Ahead

Power Integrations reported Q4 revenue of $103 million and non-GAAP earnings of $0.23 per share, largely in line with expectations. The company's non-GAAP gross margin came in at 53.3%, slightly below guidance, while non-GAAP operating expenses were $45 million, below the outlook of $47 million. For the full-year 2025, the company returned to growth, with revenue up 6% and non-GAAP EPS growing by 8%. The actual EPS of $0.23 beat estimates of $0.19, indicating a positive surprise.

Publication Date: Feb -09

📋 Highlights
  • 2025 Growth Resumed: Full-year revenue up 6% to $412M, non-GAAP EPS grew 8% to $0.92, and $112M cash flow from operations, with $145M returned to shareholders.
  • Q4 Sequential Revenue Drop: Revenue fell 13% to $103M QoQ, with industrial revenue down 23% and consumer revenue down 13% due to U.S. appliance inventory ahead of tariffs.
  • Cost Optimization: Workforce reduced by 7% globally, cutting OpEx to $45M (under $47M guidance), contributing to 53.3% non-GAAP gross margin (slightly below guidance).
  • Industrial Growth Outlook: Expected to be 2026’s fastest-growing segment, driven by 10% design win value growth in GaN/high-power products and $87M free cash flow in 2025.
  • Segment Dynamics: Consumer remains a growth area despite headwinds; data center/automotive lags, with design wins in aux power for cloud providers but slower ramp timelines.

Segment Performance and Outlook

The industrial segment is expected to be the fastest-growing area in 2026, driven by the high-power business, metering business, and other growth areas. The company expects to see significant growth in these areas, supported by wins and growth in 2025. In contrast, automotive and data center segments are expected to take more time to materialize, with the company seeing wins in automotive but slower market growth, and data center being a longer-term play.

Financial Highlights and Guidance

The company's cash flow from operations was $112 million in 2025, with free cash flow of $87 million, and $145 million returned to shareholders via buybacks and dividends. For Q1, the company expects revenue between $104 million and $109 million, with non-GAAP gross margin between 53% and 54%, and non-GAAP operating expenses around $46 million. Analysts estimate next year's revenue growth at 16.5%, indicating a potential upside.

Valuation Metrics

With a P/E Ratio of 118.56 and P/S Ratio of 5.91, the company's valuation appears to be pricing in significant growth expectations. The EV/EBITDA ratio of 52.26 also suggests a premium valuation. However, the company's ROE of 3.17% and ROIC of 1.45% indicate room for improvement in returns. The Dividend Yield of 1.77% and Free Cash Flow Yield of 3.33% provide some support to the stock.

Strategic Initiatives

The company has carried out a restructuring, reducing the global workforce by about 7% to better align expenses with revenue. This reorganization is expected to give the company flexibility to strengthen and focus on customer-centricity, driving change in product development. The company plans to be cautious in investments until bookings take form, but expects growth acceleration over the next couple of years, particularly in markets they're entering.

3. NewsRoom

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Power Integrations Extends Flyback Topology to Enable 440 W, Offering Simpler Alternatives to Resonant Power Designs

Mar -23

Source: businesswire.com

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Director Sells 10,000 Shares of this Semiconductor Stock Down 25%. Should Investors Panic?

Mar -09

Source: fool.com

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Power Integrations Reports Inducement Grants under Nasdaq Listing Rule 5635(c)(4)

Mar -05

Source: businesswire.com

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Short Interest in Power Integrations, Inc. (NASDAQ:POWI) Decreases By 14.8%

Feb -16

Source: defenseworld.net

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Is Power Integrations Stock a Buy or Sell After a Director Sold 11,363 Shares?

Feb -15

Source: fool.com

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Power Integrations, Inc. (POWI) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

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Power Integrations (POWI) Q4 Earnings Surpass Estimates

Feb -05

Source: zacks.com

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Power Integrations Reports Fourth-Quarter and Full-Year Financial Results

Feb -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.00%)

6. Segments

Integrated Circuits and Related Components

Expected Growth: 14%

Power Integrations' 14% growth in Integrated Circuits and Related Components is driven by increasing demand for energy-efficient solutions, rising adoption of IoT and 5G technologies, and growing need for high-power density and compact designs in industries such as industrial, automotive, and consumer electronics.

7. Detailed Products

InnoSwitch

A family of high-voltage, high-current, and high-power ICs that integrate a primary switch, a secondary switch, and a controller in a single package.

LinkSwitch

A family of ICs that integrate a high-voltage power switch, a controller, and a high-voltage startup circuit in a single package.

TinySwitch

A family of ICs that integrate a high-voltage power switch, a controller, and a high-voltage startup circuit in a single package.

CapZero

A family of X-capacitor discharge ICs that provide a safe and reliable way to discharge X-capacitors in AC-DC power supplies.

SENSE

A family of current sense ICs that provide accurate and reliable current sensing in high-voltage applications.

PiMatch

A family of ICs that provide a high-voltage, high-current, and high-power matching network for wireless power transfer applications.

8. Power Integrations, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Power Integrations, Inc. has a moderate threat of substitutes due to the availability of alternative power management products from competitors.

Bargaining Power Of Customers

Power Integrations, Inc. has a low bargaining power of customers due to its strong relationships with major customers and a diverse customer base.

Bargaining Power Of Suppliers

Power Integrations, Inc. has a moderate bargaining power of suppliers due to its dependence on a few key suppliers for certain components.

Threat Of New Entrants

Power Integrations, Inc. has a low threat of new entrants due to the high barriers to entry in the power management industry, including significant research and development investments.

Intensity Of Rivalry

Power Integrations, Inc. operates in a highly competitive industry with intense rivalry among established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.31%
Debt Cost 3.95%
Equity Weight 98.69%
Equity Cost 9.95%
WACC 9.87%
Leverage 1.33%

11. Quality Control: Power Integrations, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Qorvo

A-Score: 4.4/10

Value: 3.8

Growth: 3.9

Quality: 5.6

Yield: 0.0

Momentum: 8.0

Volatility: 5.0

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SiTime

A-Score: 3.6/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

1-Year Total Return ->

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Ambarella

A-Score: 3.5/10

Value: 4.6

Growth: 1.4

Quality: 4.0

Yield: 0.0

Momentum: 8.5

Volatility: 2.7

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Silicon Labs

A-Score: 3.4/10

Value: 4.6

Growth: 1.9

Quality: 2.8

Yield: 0.0

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

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Allegro MicroSystems

A-Score: 3.1/10

Value: 2.4

Growth: 1.6

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Power Integrations

A-Score: 2.7/10

Value: 1.6

Growth: 2.0

Quality: 5.6

Yield: 3.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

47.58$

Current Price

47.58$

Potential

-0.00%

Expected Cash-Flows