Home > Comparison > Technology > MPWR vs IPGP
The strategic rivalry between Monolithic Power Systems, Inc. and IPG Photonics Corporation shapes the semiconductor landscape. Monolithic Power Systems excels as a designer of integrated power electronics, focusing on diverse markets like automotive and consumer electronics. In contrast, IPG Photonics leads in high-performance fiber lasers, driving innovation in materials processing and communications. This analysis assesses which business model delivers the superior risk-adjusted return for a diversified portfolio amid evolving technology demands.
Table of contents
Companies Overview
Monolithic Power Systems and IPG Photonics hold significant stakes in the semiconductor landscape, shaping technology’s future.
Monolithic Power Systems, Inc.: Powering Electronics with Integrated Circuits
Monolithic Power Systems dominates semiconductor-based power electronics by designing DC to DC integrated circuits. Its core revenue stems from supplying voltage conversion and control solutions across computing, automotive, and industrial sectors. In 2026, the company focuses on expanding its footprint in portable devices and automotive lighting, leveraging its expertise in efficient power management.
IPG Photonics Corporation: Leader in Fiber Laser Technology
IPG Photonics excels in high-performance fiber lasers and amplifiers used predominantly for materials processing and communications. It generates revenue by selling advanced laser systems and optical components worldwide. The firm’s 2026 strategic priority lies in enhancing integrated laser solutions and broadening applications in telecommunications and medical sectors.
Strategic Collision: Similarities & Divergences
Both companies innovate within semiconductors but pursue distinct philosophies: Monolithic Power emphasizes power management ICs for diverse electronics, while IPG Photonics focuses on fiber laser systems. They compete indirectly in tech hardware, with Monolithic targeting voltage control and IPG laser-based manufacturing. Their divergent models create unique investment profiles—MPWR offers exposure to broad electronics, IPGP to niche laser technologies.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Monolithic Power Systems, Inc. (MPWR) | IPG Photonics Corporation (IPGP) |
|---|---|---|
| Revenue | 2.79B | 1.00B |
| Cost of Revenue | 1.25B | 622M |
| Operating Expenses | 811M | 368M |
| Gross Profit | 1.54B | 381M |
| EBITDA | 780M | 90M |
| EBIT | 729M | 23M |
| Interest Expense | 0 | 0 |
| Net Income | 616M | 31M |
| EPS | 12.82 | 0.73 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals the true efficiency and profitability of two leading technology firms over recent years.
Monolithic Power Systems, Inc. Analysis
Monolithic Power Systems (MPWR) shows strong revenue growth, rising from $1.2B in 2021 to $2.8B in 2025. Its gross margin remains robust at 55.18%, while net income expanded significantly, despite a 2025 net margin dip to 22.07%. Operating efficiency improved with a 35% EBIT growth in 2025, signaling resilient momentum.
IPG Photonics Corporation Analysis
IPG Photonics (IPGP) experienced declining revenue from $1.5B in 2021 to $1.0B in 2025. Its gross margin stands lower at 38%, with a modest net margin of 3.1%. Despite a 59% EBIT growth last year, overall net income deteriorated sharply, reflecting operational challenges and weaker profitability over the period.
Verdict: Robust Growth and Margins vs. Revenue Contraction and Margin Pressure
MPWR clearly outperforms IPGP with superior revenue expansion, higher and stable margins, and consistent bottom-line growth. IPGP’s declining top line and thin margins limit its profit sustainability. For investors, MPWR’s profile offers stronger fundamental growth and margin resilience.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of each company:
| Ratios | Monolithic Power Systems (MPWR) | IPG Photonics Corporation (IPGP) |
|---|---|---|
| ROE | 16.6% | 1.5% |
| ROIC | 14.9% | 0.4% |
| P/E | 70.7 | 98.1 |
| P/B | 11.7 | 1.4 |
| Current Ratio | 5.91 | 6.08 |
| Quick Ratio | 4.38 | 4.74 |
| D/E | 0 | 0 |
| Debt-to-Assets | 0 | 0 |
| Interest Coverage | 0 | 0 |
| Asset Turnover | 0.65 | 0.41 |
| Fixed Asset Turnover | 4.45 | 1.57 |
| Payout ratio | 46.2% | 0% |
| Dividend yield | 0.65% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as a company’s DNA, unveiling hidden risks and operational strengths through key metrics.
Monolithic Power Systems, Inc.
MPWR posts a strong 16.55% ROE and a 22.07% net margin, signaling robust profitability. However, its P/E of 70.69 and P/B of 11.7 mark the stock as expensive and stretched. Shareholders receive a modest 0.65% dividend yield, with significant reinvestment into R&D to fuel growth.
IPG Photonics Corporation
IPGP shows weak profitability with a 1.46% ROE and 3.1% net margin, reflecting operational challenges. Its P/E ratio at 98.08 indicates a highly expensive valuation. The company pays no dividend, focusing instead on R&D, though asset turnover and other efficiency metrics raise concerns over capital utilization.
Premium Valuation vs. Operational Safety
MPWR offers a favorable profitability and growth profile despite a high valuation, while IPGP struggles with weak returns and stretched multiples. MPWR balances risk and reward better, appealing to investors prioritizing operational strength over valuation bargains.
Which one offers the Superior Shareholder Reward?
I compare Monolithic Power Systems (MPWR) and IPG Photonics (IPGP) based on dividends, payout ratios, and buybacks. MPWR yields 0.65% with a 46% payout, backed by strong free cash flow and regular buybacks. IPGP pays no dividend, reinvesting heavily in R&D and growth but shows weak free cash flow. MPWR’s balanced yield and buyback strategy offers more sustainable, total shareholder return in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Monolithic Power Systems and IPG Photonics Corporation, highlighting their financial strengths and vulnerabilities:
Monolithic Power Systems leads in return on equity (4 vs. 2) and return on assets (5 vs. 3), showing superior operational efficiency. Both firms share weak debt-to-equity and price-to-earnings scores (1 each), signaling leveraged balance sheets and valuation concerns. IPG Photonics holds an edge in price-to-book (4 vs. 1), suggesting a more attractive market valuation. MPWR presents a more balanced operational profile, while IPGP leans on valuation strength.
Bankruptcy Risk: Solvency Showdown
The Altman Z-Scores place both companies comfortably in the safe zone, with MPWR at 61.18 and IPGP at 14.98, indicating strong long-term solvency and low bankruptcy risk:
Financial Health: Quality of Operations
Both companies score averagely on the Piotroski F-Score, with MPWR at 5 and IPGP at 6, reflecting moderate financial health but no glaring red flags:
How are the two companies positioned?
This section dissects the operational DNA of MPWR and IPGP by comparing their revenue distribution by segment and internal dynamics. The final objective confronts their economic moats to identify which model offers the most resilient and sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
The following visual comparison dissects how Monolithic Power Systems, Inc. and IPG Photonics Corporation diversify their income streams and where their primary sector bets lie:
Monolithic Power Systems anchors revenue in DC To DC Products, generating $1.72B in 2023, dwarfing its $102M Lighting Control segment. IPG Photonics displays a broader mix, with no single segment dominating; High Power CW Lasers lead at $333M, but Pulsed and Amplifiers segments also contribute significantly. MPWR’s reliance on one segment suggests concentration risk, while IPGP’s diversified portfolio supports ecosystem lock-in and resilience amid market shifts.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of Monolithic Power Systems, Inc. (MPWR) and IPG Photonics Corporation (IPGP):
MPWR Strengths
- High profitability with net margin of 22%
- Strong ROE of 16.55% and ROIC of 14.93%
- Zero debt and infinite interest coverage
- High quick ratio of 4.38 supports liquidity
- Diversified revenue in DC to DC and lighting products
- Significant global sales, especially in China and Taiwan
IPGP Strengths
- Zero debt and infinite interest coverage ensure financial stability
- Favorable PB ratio of 1.43 suggests undervaluation
- Diverse product portfolio in lasers and amplifiers
- Global presence including North America, Europe, and Asia
- Stable quick ratio of 4.74 supports short-term liquidity
MPWR Weaknesses
- Unfavorable high PE of 70.69 may indicate overvaluation
- Elevated PB of 11.7 suggests premium pricing
- Current ratio of 5.91 flagged as unfavorable, possibly inefficient asset use
- WACC higher than ROIC indicates expensive capital
- Low dividend yield of 0.65% limits income potential
- Moderate asset turnover at 0.65 hints at asset utilization concerns
IPGP Weaknesses
- Low profitability with net margin of 3.1%, ROE 1.46%, and ROIC 0.41%
- High PE of 98.08 suggests overvaluation risk
- Unfavorable current ratio above 6 may reflect inefficient capital management
- Asset turnover low at 0.41, indicating weak asset productivity
- No dividend yield reduces income appeal
Both companies show strong balance sheets with zero debt and good liquidity ratios, reflecting prudent financial management. MPWR’s superior profitability contrasts with IPGP’s weaker margins, highlighting differing operational efficiencies. Both face valuation concerns due to high PE ratios. The comparison suggests each company must balance growth expectations and capital efficiency in their strategic plans.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competitive erosion. Let’s dissect the defensive strengths of two semiconductor firms:
Monolithic Power Systems, Inc.: Cost Advantage with Margin Resilience
Monolithic’s moat stems from a robust cost advantage, delivering a 55% gross margin and stable 26% EBIT margins. Despite a slightly declining ROIC trend, its expanding markets in automotive and computing deepen this moat in 2026.
IPG Photonics Corporation: Specialized Technology Under Pressure
IPG’s intangible asset moat relies on cutting-edge fiber laser technology. Yet, its weak 2.3% EBIT margin and sharply negative ROIC trend signal eroding profitability. Opportunities in advanced materials could stabilize, but disruption risks persist.
Value Creation vs. Technological Edge: Who Defends Better?
Monolithic Power holds the wider and more enduring moat with consistent value creation (ROIC > WACC by 4.4%). IPG struggles with value destruction and a steep ROIC decline. Monolithic is better positioned to defend market share under competitive pressure.
Which stock offers better returns?
Over the past year, both Monolithic Power Systems and IPG Photonics showed strong price appreciation with accelerating bullish trends, highlighted by significant gains and rising trading volumes.
Trend Comparison
Monolithic Power Systems (MPWR) posted a 74.25% price rise over 12 months, accelerating with high volatility and a peak near 1,230. The recent 26.21% gain reinforces its strong upward momentum.
IPG Photonics (IPGP) also advanced 71.01% in the same period, with lower volatility and a high near 154. Its recent 93.26% surge shows continued acceleration but with less steep slope than MPWR.
MPWR and IPGP both exhibit bullish acceleration, but MPWR’s larger overall gain and higher volatility suggest it delivered the strongest market performance.
Target Prices
Analysts present a clear target consensus for Monolithic Power Systems and IPG Photonics, reflecting positive growth expectations.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Monolithic Power Systems, Inc. | 1200 | 1500 | 1313.71 |
| IPG Photonics Corporation | 110 | 180 | 151.67 |
Both stocks trade near their consensus targets, indicating moderate upside potential for Monolithic Power and balanced expectations for IPG Photonics.
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How do institutions grade them?
Below is a comparison of recent institutional grades for Monolithic Power Systems, Inc. and IPG Photonics Corporation:
Monolithic Power Systems, Inc. Grades
This table summarizes recent grades and actions from reliable grading companies for MPWR.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Buy | 2026-02-09 |
| Keybanc | Maintain | Overweight | 2026-02-06 |
| Truist Securities | Maintain | Buy | 2026-02-06 |
| Needham | Maintain | Buy | 2026-02-06 |
| Rosenblatt | Maintain | Neutral | 2026-02-06 |
| Wells Fargo | Maintain | Overweight | 2026-02-06 |
| Stifel | Maintain | Buy | 2026-02-04 |
| Wells Fargo | Maintain | Overweight | 2026-01-26 |
| Wells Fargo | Upgrade | Overweight | 2026-01-15 |
| Truist Securities | Maintain | Buy | 2025-12-19 |
IPG Photonics Corporation Grades
This table presents recent grades and actions from verified grading firms for IPGP.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | Maintain | Buy | 2026-02-13 |
| Raymond James | Downgrade | Outperform | 2026-02-13 |
| Roth Capital | Maintain | Buy | 2026-02-03 |
| Citigroup | Upgrade | Buy | 2025-11-05 |
| Bernstein | Upgrade | Outperform | 2025-08-07 |
| Raymond James | Maintain | Strong Buy | 2025-05-07 |
| CL King | Upgrade | Buy | 2025-03-18 |
| Citigroup | Maintain | Sell | 2025-02-18 |
| Needham | Maintain | Hold | 2025-02-12 |
| Stifel | Maintain | Buy | 2025-02-12 |
Which company has the best grades?
Monolithic Power Systems consistently receives Buy and Overweight ratings, showing broad institutional confidence. IPG Photonics has a wider range, including Strong Buy and Outperform grades, but also a Sell rating from Citigroup. Investors may find MPWR’s consensus more stable, while IPGP shows mixed sentiment indicating greater risk and opportunity.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Monolithic Power Systems, Inc.
- Faces intense semiconductor competition with strong innovation demands; high PE and PB ratios signal potential overvaluation risk.
IPG Photonics Corporation
- Operates in niche laser markets but struggles with low profitability and slower asset turnover, indicating competitive pressure.
2. Capital Structure & Debt
Monolithic Power Systems, Inc.
- Zero debt and infinite interest coverage provide a robust balance sheet and low financial risk.
IPG Photonics Corporation
- Also debt-free with infinite interest coverage, maintaining financial stability despite operational challenges.
3. Stock Volatility
Monolithic Power Systems, Inc.
- Beta of 1.455 shows higher volatility than the tech sector average, increasing price risk.
IPG Photonics Corporation
- Beta near 1.028 suggests market-aligned volatility, implying more stable stock price behavior.
4. Regulatory & Legal
Monolithic Power Systems, Inc.
- Semiconductor sector faces evolving technology regulations and export controls impacting global sales.
IPG Photonics Corporation
- Laser technology subject to export regulations and potential IP litigation risks in specialized markets.
5. Supply Chain & Operations
Monolithic Power Systems, Inc.
- Global supply chain exposed to semiconductor material shortages and geopolitical disruptions.
IPG Photonics Corporation
- Relies on advanced components with potential supply bottlenecks, affecting production timelines.
6. ESG & Climate Transition
Monolithic Power Systems, Inc.
- Pressure to enhance energy efficiency and reduce carbon footprint in semiconductor manufacturing.
IPG Photonics Corporation
- Faces growing demand for sustainable operations in laser production and product lifecycle.
7. Geopolitical Exposure
Monolithic Power Systems, Inc.
- Significant sales in China and Asia heighten exposure to US-China tensions and trade barriers.
IPG Photonics Corporation
- Global operations with notable US and European markets face risks from shifting geopolitical alliances.
Which company shows a better risk-adjusted profile?
Monolithic Power Systems’ strongest risk is its high valuation multiples paired with volatile stock behavior. IPG Photonics’ biggest risk lies in its weak profitability and asset utilization. Despite MPWR’s volatility, its zero debt and robust profitability offer a superior risk-adjusted profile. IPGP’s financial fragility and unfavorable operational ratios undermine its stability. The higher beta and stretched valuations for MPWR contrast with IPGP’s profitability struggles, justifying cautious optimism for MPWR in 2026.
Final Verdict: Which stock to choose?
Monolithic Power Systems (MPWR) wields unmatched efficiency as its superpower, generating strong returns on invested capital well above its cost of capital. Its point of vigilance lies in a notably high valuation and stretched current ratio, which could pressure liquidity. MPWR suits aggressive growth portfolios willing to pay for quality and innovation.
IPG Photonics (IPGP) leverages a strategic moat through its specialized photonics technology and recurring revenue from niche markets. While its profitability metrics lag behind MPWR, it offers a more stable balance sheet and less aggressive valuation multiples. IPGP fits well within GARP (Growth at a Reasonable Price) portfolios seeking steady exposure in tech innovation.
If you prioritize high-efficiency capital deployment and growth momentum, MPWR outshines with superior value creation despite valuation risks. However, if you seek better stability and a defensive technology play, IPGP offers a safer profile with a durable niche moat. Each stock aligns with distinct investor appetites in 2026’s evolving market landscape.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Monolithic Power Systems, Inc. and IPG Photonics Corporation to enhance your investment decisions:
