Power Integrations (POWI) Earnings Preview
Power Integrations (POWI) reporting earnings tonight after the close and name that has seen buyers twice this week in the May $90 calls with over 2,500 accumulating. Activity on both days was about 115X average and IV30 up 5% yesterday. The Street is looking for $0.56 on $149.5M in sales. Next quarter is guided to $0.50/$146.67M while the FY is $1.99 and $565.68M. Shares have closed higher in four of the last seven with an average closing move of 3% and a max move of 5.89%. The current implied move is 5.5%. Shares are setting up well in a weekly bull wedge under $90 with upside to $110 on a breakout to new highs. The $4.85B company trades 38.2X earnings, 9.9X sales, and 10.8X cash. POWI makes analog and mixed-signal integrated circuits (ICs) used in high-voltage power conversion. POWI continues to see higher content in household appliances from network connectivity and LED growth while 5G growth is powering adoption of advanced chargers. They should continue to see higher demand in communications as PCs, smartphones, and tablets have all shown no sign of paring back so far early in 2021. Analysts have an average target for shares of $87 and a Street High $105. Cowen positive in March citing room for price hikes given low channel inventory and healthy demand as arguably the largest margin opportunity until heavy industrial projects return. Loop Capital has a $105 PT for shares as rapid charging continues to perform well, benefitting from the company and the market-specific growth drivers. Short interest is 3%. Hedge fund ownership fell 13% in Q4.