Maxlinear (MXL) AI Stock Analysis

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Maxlinear

(NASDAQ:MXL)

45Neutral

Maxlinear's overall stock score is driven by significant financial performance challenges, with declining revenues and profitability issues. Technical indicators suggest bearish trends, and valuation metrics are unattractive due to negative earnings. Although the earnings call offered some optimism for growth in strategic segments, ongoing operational and liquidity challenges remain substantial risks.

Positive Factors

AI Investment

MaxLinear is well positioned to benefit from sustained AI investment and a recovery in service provider capex, both of which are generally less impacted by tariffs than consumer markets.

Design Wins

Recent design wins with a second North American telco service provider for the home gateway device potentially represent a $100 million annual revenue opportunity.

Product Portfolio

MaxLinear's diversified product portfolio is well aligned to capture growing demand for infrastructure and connectivity solutions across data centers, core, and edge networks.

Negative Factors

AI Investment Concerns

There are concerns over the share overhang from fears of slowing AI investment trends, potential impact related to tariffs and the SIMO arbitration.

Demand Destruction

End demand destruction is seen as the greatest risk, with too many questions remaining unanswered to fully evaluate the potential demand implications.

Maxlinear (MXL) vs. S&P 500 (SPY)

Market Cap

$855.10M

Dividend YieldN/A

Average Volume (3M)1.62M

Price to Earnings (P/E)―

Beta (1Y)2.37

Revenue Growth-48.00%

EPS Growth-227.62%

CountryUS

Employees1,294

SectorTechnology

Sector Strength55

IndustrySemiconductors

Share Statistics

EPS (TTM)-2.93

Shares Outstanding86,373,820

10 Day Avg. Volume1,834,677

30 Day Avg. Volume1,616,396

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.98

Price to Cash Flow (P/CF)-9.70

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$22.21

Price Target Upside118.82% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Maxlinear Business Overview & Revenue Model

Company DescriptionMaxLinear, Inc. provides radiofrequency (RF), high-performance analog, and mixed-signal communications systems-on-chip solutions (SoCs) for the connected home, wired and wireless infrastructure, and industrial and multi-market applications worldwide. Its products integrate various portions of a high-speed communication system, including RF, high-performance analog, mixed-signal, digital signal processing, security engines, data compression, networking layers, and power management. The company offers broadband radio transceiver front ends, data converters, embedded systems and software architecture, and architecture and system design for highly integrated end-to-end communication platform solutions. Its products are used in various electronic devices, such as cable data over cable service interface specifications (DOCSIS), fiber and DSL broadband modems and gateways; Wi-Fi and wireline routers for home networking; radio transceivers and modems for 4G/5G base-station and backhaul infrastructure; and fiber-optic modules for data center, metro, and long-haul transport networks, as well as power management and interface products. It serves electronics distributors, module makers, original equipment manufacturers (OEMs), and original design manufacturers (ODMs) through a direct sales force, third-party sales representatives, and a network of distributors. The company was incorporated in 2003 and is headquartered in Carlsbad, California.

How the Company Makes MoneyMaxlinear generates revenue primarily through the sale of its semiconductor products to original equipment manufacturers (OEMs) and other technology companies that integrate these components into their own products. The company's key revenue streams come from its broad portfolio of RF, analog, and power management solutions, designed to meet the needs of diverse markets like broadband communications and data centers. Maxlinear also benefits from strategic partnerships and collaborations with industry leaders to enhance its product offerings and expand its market reach. Furthermore, the company's research and development efforts play a significant role in maintaining its competitive edge and driving long-term revenue growth.

Maxlinear Financial Statement Overview

Summary

Maxlinear is facing financial headwinds characterized by declining revenues, negative profitability, and weakening cash flow. While the balance sheet shows some stability, operational and liquidity challenges need to be addressed to improve the company's financial health.

Income Statement

Neutral

Maxlinear's income statement shows significant challenges. The gross profit margin has declined, and the net profit margin is negative due to substantial losses in recent years. Revenue growth is negative, indicating a declining trend in sales. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.

Balance Sheet

Neutral

The balance sheet indicates moderate financial stability. The debt-to-equity ratio is manageable, but there is a notable decrease in stockholders' equity over the years. The equity ratio remains relatively stable, suggesting cautious management of assets and liabilities.

Cash Flow

Negative

Cash flow analysis reveals a troubling trajectory. Operating cash flow has turned negative, and free cash flow has decreased significantly, indicating potential liquidity issues. The ratios related to net income are unfavorable due to the company's losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
360.53M	693.26M	1.12B	892.40M	478.60M
	Gross Profit
194.78M	385.66M	649.77M	495.83M	212.80M
	EBIT
-223.35M	-38.22M	180.24M	65.25M	-97.22M
	EBITDA
-173.70M	9.53M	255.86M	145.27M	-29.28M
	Net Income Common Stockholders
-245.20M	-73.15M	125.04M	41.97M	-98.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
118.58M	187.29M	205.88M	130.57M	148.90M
	Total Assets
864.64M	1.08B	1.18B	1.05B	1.02B
	Total Debt
139.95M	157.75M	155.60M	330.79M	384.45M
	Net Debt
21.37M	-29.54M	-31.75M	200.22M	235.55M
	Total Liabilities
348.36M	393.99M	503.64M	561.19M	631.33M
	Stockholders Equity
516.28M	686.26M	676.38M	489.20M	391.12M
Cash Flow		Free Cash Flow
-45.30M	23.56M	336.29M	121.48M	58.31M
	Operating Cash Flow
-45.30M	43.37M	388.73M	168.23M	73.59M
	Investing Cash Flow
-23.45M	-15.94M	-91.76M	-91.76M	-175.29M
	Financing Cash Flow
1.29M	-26.36M	-240.40M	-91.90M	159.65M

Maxlinear Technical Analysis

Technical Analysis Sentiment

Negative

Last Price10.15

Price Trends

50DMA

13.30

Negative

100DMA

16.41

Negative

200DMA

15.85

Negative

Market Momentum

MACD

-1.01

Negative

RSI

41.42

Neutral

STOCH

52.63

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MXL, the sentiment is Negative. The current price of 10.15 is below the 20-day moving average (MA) of 11.12, below the 50-day MA of 13.30, and below the 200-day MA of 15.85, indicating a bearish trend. The MACD of -1.01 indicates Negative momentum. The RSI at 41.42 is Neutral, neither overbought nor oversold. The STOCH value of 52.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MXL.

Maxlinear Risk Analysis

Maxlinear disclosed 51 risk factors in its most recent earnings report. Maxlinear reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Maxlinear Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	67 Neutral	$581.30M	13.04	5.71%	5.27%	3.24%	-26.85%
Sector *	58 Neutral	$11.04B	9.83	-6.56%	3.16%	7.59%	-10.43%
ICHR	58 Neutral	$606.53M	―	-3.30%	―	4.68%	55.72%
UCTT	55 Neutral	$894.52M	38.15	2.77%	―	20.92%	―
COHU	48 Neutral	$669.71M	―	-7.73%	―	-36.86%	-351.11%
AOSL	47 Neutral	$561.24M	―	-2.57%	―	4.12%	-29.74%
MXL	45 Neutral	$855.10M	―	-40.78%	―	-48.00%	-227.62%

* Technology Sector Average

Performance Comparison

MXL

Maxlinear

10.15

-10.41

-50.63%

AOSL

Alpha and Omega

18.06

-2.60

-12.58%

IMOS

ChipMOS Technologies

15.74

-12.23

-43.73%

COHU

Cohu

13.93

-15.81

-53.16%

UCTT

Ultra Clean Holdings

18.78

-23.07

-55.13%

ICHR

Ichor Holdings

17.07

-21.13

-55.31%

Maxlinear Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -53.42% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a balanced sentiment with strong revenue growth and design wins in high-speed optical data center connectivity, but also highlights challenges with cash flow, day sales outstanding, and operating losses. The company's strategic investments are positioning it for future growth, though current operational efficiencies and market segment challenges persist.

Highlights

Revenue and Growth

Total revenue for the fourth quarter was $92.2 million, up 14% from $81.1 million in the previous quarter. The company exceeded its own internal revenue targets for 2024, showing significant growth and design win traction in optical interconnect markets.

Optical Business Expansion

MaxLinear shipped approximately 1 million units of its Keystone product across multiple customers, contributing to a revenue growth target of $60-70 million for 2025 in the optical segment.

Infrastructure Segment Performance

Infrastructure revenue for the fourth quarter was $27 million, with expectations for further growth in 2025, driven by new product launches and design wins in high-speed optical data center connectivity.

Cost Management and Operational Efficiency

Significant reduction in operating expenses with fourth quarter non-GAAP operating expenses at $61.3 million, positioning the company for a return to profitability in 2025.

Lowlights

Cash Flow and DSO Challenges

Cash flow used in operating activities was approximately $28 million for Q4, with day sales outstanding up to approximately 85 days, indicating ongoing working capital challenges.

Broadband and Industrial Multi-Market Slowdown

Industrial multi-market revenue was $16 million, with expectations of a decline in the first quarter of 2025. Connectivity revenue is expected to be approximately flat for Q1 2025.

Operating Loss

GAAP and non-GAAP loss from operations for Q4 2024 was 45% and 7% of net revenue respectively, reflecting ongoing challenges in achieving profitability.

Company Guidance

During the MaxLinear Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the first quarter of 2025, including an expected revenue range of $85 million to $105 million. They projected GAAP gross margin to be between 54.5% and 57.5%, and non-GAAP gross margin to range from 57.5% to 60.5% of revenue. Operating expenses on a GAAP basis were anticipated to be between $93 million and $99 million, while non-GAAP operating expenses were expected to fall between $56 million and $62 million. Additionally, the company forecasted GAAP and non-GAAP interest and other expenses to be approximately $1 million to $2 million, with a GAAP tax expense of $2.7 million and no non-GAAP tax expenses. The GAAP and non-GAAP diluted share count was projected to be approximately 85.5 million each. The company expressed confidence in entering a new growth phase in 2025, driven by improved customer orders and new product traction in strategic areas such as optical high-speed interconnects and wireless infrastructure.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.