Maxlinear (MXL – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Sujeeva De Silva from Roth MKM downgraded the rating on the stock to a Hold and gave it a $18.00 price target.
Sujeeva De Silva has given his Hold rating for Maxlinear due to a range of factors. Firstly, Maxlinear’s revenue fell slightly behind consensus and is expected to further decline in 4Q23. The company has been experiencing weaker demand and persistent inventory digestion issues in key markets. As a result, De Silva no longer anticipates revenue stabilization in 2024, and in fact, he projects a 9% year-over-year decline. A return to positive year-over-year growth is not expected until 3Q24. This led to a lowering of the price target from $35 to $18 and a downgrade from Buy to Neutral.
Maxlinear’s broadband and connectivity segments are particularly impacted by these inventory digestion issues, offsetting relative strength in wireless infrastructure. Additionally, the company’s guidance for 4Q23 revenue was disappointing, falling well below consensus expectations. This reflects continued sluggish ordering as broadband customers digest excess inventory levels. While some segments, such as connectivity and industrial, are expected to recover from current lower levels, broadband and infrastructure are expected to continue declining. This suggests a return to overall revenue growth is a medium-term opportunity. Despite these challenges, De Silva acknowledges that Maxlinear is taking steps to manage its cost structure and sees potential tailwinds in 2H24. However, he advises waiting for greater visibility before becoming more aggressive on Maxlinear shares.
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Maxlinear (MXL) Company Description:
MaxLinear, Inc. engages in the provision of radio frequency, high-performance analog and mixed-signal communications systems-on-chip solutions for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. Its products include cable broadband modems and gateways, wireline connectivity devices, radio frequency transceivers, fiber-optic modules, video set-top boxes and gateways, hybrid analog and digital televisions, direct broadcast satellite outdoor and indoor units, and power management and interface products. The company was founded by Kimihiko Imura, Curtis C. Ling and Kishore V. Seendripu on September 25, 2003 and is headquartered in Carlsbad, CA.
Read More on MXL:
- MaxLinear price target lowered to $30 from $40 at Susquehanna
- Maxlinear (MXL) Q3 Earnings Cheat Sheet
- MaxLinear downgraded to Hold from Buy at Deutsche Bank
- Silicon Motion files notice of arbitration claim against MaxLinear
- Silicon Motion provides additional details on MaxLinear’s termination of merger
