Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Monolithic Power Systems Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The company exhibited a volatile but ultimately strong growth trajectory in cash generation between 2020 and 2024. After a period of relative stability and a moderate decline in 2022, there was a significant surge in both operating cash flows and free cash flow to the firm (FCFF) starting in 2023.
- Operating Cash Flow Performance
- Net cash provided by operating activities grew from 267,803 thousand USD in 2020 to 320,010 thousand USD in 2021, before experiencing a decline to 246,674 thousand USD in 2022. A substantial acceleration occurred in 2023, where operating cash flow increased by approximately 159% to 638,213 thousand USD, further rising to 788,410 thousand USD by the end of 2024.
- Free Cash Flow to the Firm (FCFF) Trends
- FCFF followed a similar pattern to operating cash flow, starting at 212,193 thousand USD in 2020 and reaching a cyclical low of 187,831 thousand USD in 2022. This was followed by a sharp increase to 580,635 thousand USD in 2023 and a further ascent to 642,292 thousand USD in 2024, indicating a marked improvement in the firm's ability to generate cash available to all capital providers.
- Capital Expenditure and Conversion Analysis
- The variance between operating cash flow and FCFF indicates the level of capital expenditures. While the gap remained relatively consistent between 2020 and 2023, a notable increase in capital allocation is observed in 2024, where the difference expanded to 146,118 thousand USD. Despite this increased investment, the overall cash conversion remained positive, reflecting a strong capacity to fund growth through internal operations.
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Interest Paid, Net of Tax
Monolithic Power Systems Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= 0 × 21.00% = 0
An analysis of the provided financial metrics indicates a total absence of reported values for interest paid, net of tax, for the period spanning December 31, 2020, to December 31, 2024. While the primary metric for interest expenditure is unavailable, the effective income tax rate, which typically determines the tax shield provided by interest expenses, shows a significant upward trend over the five-year period.
- Interest Paid, Net of Tax
- No data is available for this line item from 2020 through 2024, making it impossible to evaluate the company's net cash outflows related to interest or the impact of tax deductions on these payments.
- Effective Income Tax Rate (EITR) Progression
- A general increase in the EITR is observed, starting at 2.90% in 2020 and rising to 11.10% in 2021 and 16.60% in 2022. A slight contraction occurred in 2023, where the rate declined to 15.50%, before increasing to a period high of 21.00% by December 31, 2024.
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Enterprise Value to FCFF Ratio, Current
Monolithic Power Systems Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 29,176,967) |
| Free cash flow to the firm (FCFF) | 642,292) |
| Valuation Ratio | |
| EV/FCFF | 45.43 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Advanced Micro Devices Inc. | 183.78 |
| Analog Devices Inc. | 45.50 |
| Applied Materials Inc. | 72.56 |
| Broadcom Inc. | 60.10 |
| Intel Corp. | — |
| KLA Corp. | 67.64 |
| Lam Research Corp. | 86.25 |
| Marvell Technology Inc. | 152.77 |
| Micron Technology Inc. | 524.82 |
| NVIDIA Corp. | 57.63 |
| Qualcomm Inc. | 15.05 |
| Texas Instruments Inc. | 89.85 |
| EV/FCFF, Sector | |
| Semiconductors & Semiconductor Equipment | 173.01 |
| EV/FCFF, Industry | |
| Information Technology | 71.05 |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Monolithic Power Systems Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 26,847,639) | 33,896,186) | 22,113,280) | 20,736,031) | 17,153,737) | |
| Free cash flow to the firm (FCFF)2 | 642,292) | 580,635) | 187,831) | 225,590) | 212,193) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 41.80 | 58.38 | 117.73 | 91.92 | 80.84 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Advanced Micro Devices Inc. | 72.30 | 225.41 | 38.82 | 43.41 | — | |
| Analog Devices Inc. | 33.82 | 25.61 | 23.12 | 39.16 | 27.12 | |
| Applied Materials Inc. | 17.55 | 17.40 | 19.06 | 26.22 | 22.52 | |
| Broadcom Inc. | 51.00 | 28.53 | 14.74 | 19.47 | 16.54 | |
| Intel Corp. | — | — | — | 16.94 | — | |
| KLA Corp. | 29.56 | 19.99 | 19.05 | 26.29 | — | |
| Lam Research Corp. | 24.56 | 17.99 | 24.08 | 24.40 | — | |
| Marvell Technology Inc. | 53.36 | 32.51 | 83.26 | 44.07 | — | |
| Micron Technology Inc. | 203.18 | — | 16.58 | 28.79 | 188.88 | |
| NVIDIA Corp. | 61.32 | 142.92 | 78.06 | 69.50 | — | |
| Qualcomm Inc. | 16.26 | 11.61 | 18.18 | 17.47 | 30.89 | |
| Texas Instruments Inc. | 89.36 | 89.85 | 27.02 | 24.20 | — | |
| EV/FCFF, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 56.96 | 59.47 | 35.63 | 26.35 | — | |
| EV/FCFF, Industry | ||||||
| Information Technology | 39.04 | 33.99 | 26.47 | 27.37 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 26,847,639 ÷ 642,292 = 41.80
4 Click competitor name to see calculations.
The analysis of the Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio reveals a significant shift in the company's valuation dynamics over the five-year period from 2020 to 2024. While the enterprise value experienced volatility, the cash flow generation capabilities improved substantially in the latter years, leading to a marked contraction in the valuation multiple.
- Enterprise Value Trends
- Enterprise value exhibited a consistent upward trajectory from 2020 through 2023, increasing from 17.15 billion US$ to a peak of 33.90 billion US$. This growth phase was followed by a correction in 2024, where the enterprise value decreased to 26.85 billion US$.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow generation remained relatively stagnant between 2020 and 2022, with values fluctuating between 187.8 million and 225.6 million US$. A substantial inflection occurred in 2023, as FCFF surged to 580.6 million US$, continuing its growth to reach 642.3 million US$ by the end of 2024. This indicates a significant improvement in the firm's ability to generate surplus cash.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio underwent an expansionary period between 2020 and 2022, reaching a peak of 117.73. This peak suggests a period of high valuation premiums relative to the cash flows being produced. However, the ratio declined sharply to 58.38 in 2023 and further to 41.80 in 2024. This downward trend is primarily attributed to the rapid acceleration of FCFF, which outpaced the changes in enterprise value, resulting in a more conservative and cash-flow-supported valuation multiple.
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