Power Integrations: Efficiency Is The Ultimate Clean Energy

Summary

• Power Integrations, a leader in GaN high-voltage power conversion, faces short-term headwinds but holds strong long-term growth potential in diverse, rapidly growing markets.
• The company benefits from high customer switching costs, a solid balance sheet with no long-term debt, and strategic share repurchases.
• The current valuation appears high, but adjusting for net cash and looking at forward earnings, shares look more reasonably priced.
• Risks include a potential U.S. recession and tariffs on Japan, but these are mitigated by end-market diversification and strong financial health.

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Power Integrations (POWI) is a unique company that we have been following for some time. We started with a "Sell" rating as we thought the company's valuation was excessive, and since then, shares have lost roughly half

Analyst’s Disclosure:I/we have a beneficial long position in the shares of POWI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling shares, you should do your own research and reach your own conclusion, or consult a financial advisor. Investing includes risks, including loss of principal.