Power Integrations’ Upcoming Q4 Results Preview

Deutsche Bank analysts provided their outlook on Power Integrations, Inc. (NASDAQ:POWI) ahead of the upcoming Q4 results announcement.

Given the well-known Smartphone channel inventory and global macroeconomic uncertainties, the analysts believe a roughly in-line print and especially an in-line guide would be viewed as a positive outcome amongst investors, albeit with recent negative commentary from handset peers rendering the latter increasingly unlikely.

As such, despite the company's precedent of being the first ones to call out the "bottom" and appropriately resetting expectations during its last report, the analysts think that downside risk remains, with continued China Smartphone and global consumer weakness potentially pushing out the expected recovery into H2/23 (vs. Q2/23 expected).

Overall, while the analysts remain impressed by the company's solid execution towards its long-term strategy, they believe the upside to the stock will be relatively limited until the near-term headwinds within its Comms segment and the rest of its consumer-exposed segments of Consumer & Computing abate.