Power Integrations (NASDAQ:POWI) Trading Down 5.4% - Here's Why

Key Points

• Shares of Power Integrations were down 5.4% on Monday, trading at about $69.56 on very light volume (≈120,255 shares, an 87% drop from the average daily volume).
• Analyst sentiment is mixed—three Buys, two Holds and one Sell—with a MarketBeat consensus rating of Hold and an average price target of $56.50, well below the current share price.
• The company beat quarterly EPS estimates ($0.23 vs. $0.19) while revenue fell 1.9% year-over-year; however, valuation looks rich (PE ~180.35, PEG 5.58) and management raised the quarterly dividend to $0.215 (yield 1.2%) despite a very high payout ratio (DPR 220.51%).

Shares of Power Integrations, Inc. (NASDAQ:POWI - Get Free Report) dropped 5.4% on Monday . The stock traded as low as $69.60 and last traded at $69.56. Approximately 120,255 shares were traded during trading, a decline of 87% from the average daily volume of 937,384 shares. The stock had previously closed at $73.54.

Wall Street Analyst Weigh In

Several equities research analysts have commented on the company. Susquehanna upped their price objective on Power Integrations from $50.00 to $53.00 and gave the stock a "positive" rating in a research report on Thursday, January 22nd. Benchmark boosted their target price on shares of Power Integrations from $55.00 to $65.00 and gave the company a "buy" rating in a research note on Monday, April 6th. Zacks Research raised shares of Power Integrations from a "strong sell" rating to a "hold" rating in a report on Thursday, February 26th. Stifel Nicolaus lifted their price objective on shares of Power Integrations from $56.00 to $62.00 and gave the company a "buy" rating in a report on Thursday, April 16th. Finally, Weiss Ratings reiterated a "sell (d)" rating on shares of Power Integrations in a research report on Monday, December 29th. Three investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, Power Integrations presently has an average rating of "Hold" and a consensus price target of $56.50.

Power Integrations Stock Down 4.3%

The firm has a market capitalization of $3.92 billion, a PE ratio of 180.35, a PEG ratio of 5.58 and a beta of 1.30. The stock has a 50-day moving average price of $51.39 and a 200 day moving average price of $43.93.

Power Integrations (NASDAQ:POWI - Get Free Report) last announced its earnings results on Thursday, February 5th. The semiconductor company reported $0.23 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.19 by $0.04. Power Integrations had a return on equity of 5.15% and a net margin of 4.98%.The firm had revenue of $103.20 million for the quarter, compared to analyst estimates of $103.02 million. During the same quarter last year, the firm posted $0.30 EPS. The business's revenue was down 1.9% on a year-over-year basis. As a group, equities analysts predict that Power Integrations, Inc. will post 0.64 earnings per share for the current fiscal year.

Power Integrations Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Friday, February 27th were given a $0.215 dividend. This represents a $0.86 annualized dividend and a dividend yield of 1.2%. This is a positive change from Power Integrations's previous quarterly dividend of $0.21. The ex-dividend date was Friday, February 27th. Power Integrations's dividend payout ratio (DPR) is 220.51%.

Insider Activity at Power Integrations

In other Power Integrations news, Director Balu Balakrishnan sold 4,995 shares of the stock in a transaction that occurred on Tuesday, February 10th. The stock was sold at an average price of $47.20, for a total transaction of $235,764.00. Following the completion of the transaction, the director owned 576,256 shares of the company's stock, valued at $27,199,283.20. This represents a 0.86% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, VP Sunil Gupta sold 1,272 shares of Power Integrations stock in a transaction that occurred on Tuesday, February 10th. The stock was sold at an average price of $45.97, for a total value of $58,473.84. Following the completion of the sale, the vice president directly owned 96,933 shares in the company, valued at $4,456,010.01. This represents a 1.30% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 41,831 shares of company stock worth $1,936,896 over the last three months. Company insiders own 1.40% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. Snyder Capital Management L P boosted its stake in Power Integrations by 148.8% during the 4th quarter. Snyder Capital Management L P now owns 2,064,707 shares of the semiconductor company's stock worth $73,380,000 after purchasing an additional 1,234,981 shares during the last quarter. Price T Rowe Associates Inc. MD lifted its stake in shares of Power Integrations by 1,885.7% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 943,365 shares of the semiconductor company's stock worth $33,528,000 after buying an additional 895,857 shares in the last quarter. M&T Bank Corp boosted its position in Power Integrations by 3,635.7% during the fourth quarter. M&T Bank Corp now owns 748,555 shares of the semiconductor company's stock worth $26,604,000 after acquiring an additional 728,517 shares during the last quarter. Wellington Management Group LLP grew its stake in Power Integrations by 35.7% during the 3rd quarter. Wellington Management Group LLP now owns 2,261,281 shares of the semiconductor company's stock valued at $90,926,000 after acquiring an additional 595,404 shares in the last quarter. Finally, State Street Corp grew its stake in Power Integrations by 18.0% during the 4th quarter. State Street Corp now owns 3,400,970 shares of the semiconductor company's stock valued at $120,870,000 after acquiring an additional 518,284 shares in the last quarter.

Power Integrations Company Profile

Power Integrations, Inc, based in Hillsboro, Oregon, specializes in the design and development of high-performance analog and mixed-signal integrated circuits for energy-efficient power conversion. The company's products are used to convert and regulate electrical power in a wide range of applications, from consumer electronics and industrial systems to communications equipment and electric vehicle charging. By providing compact, reliable, and highly integrated solutions, Power Integrations aims to reduce system size, improve efficiency, and simplify thermal management for its customers.

The firm's product portfolio encompasses isolated and non-isolated switching controllers for both AC-DC and DC-DC power conversion.

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