Monday - Benchmark has raised the price target for MaxLinear (NASDAQ:MXL) shares to $28 from the previous $23 while maintaining a Buy rating.
"We are increasingly upbeat on the setup into the second half as inventory headwinds ease and new product ramps begin to contribute meaningfully over the next several quarters," said the analysts
They highlighted that despite concerns regarding the potential liability from the terminated SIMO transaction, the expectation is that the full break-up fee would only be a worst-case scenario.
The improved sentiment towards MaxLinear is evidenced by its performance, outshining its peers in the past 30 days. This trend is believed to reflect a growing confidence in macroeconomic stabilization. MaxLinear's portfolio of new products is securing design wins, and the company's foray into artificial intelligence is anticipated to tap into a market worth over $100 million in the near term.
Furthermore, the transition to Wi-Fi 7, expected to start in the second half of 2024, is seen as a significant opportunity for bill of materials (BOM) expansion. This comes alongside increasing fiber penetration and the resumption of passive optical network (PON) deployments, which are projected to drive considerable growth in the coming years.
Benchmark views MaxLinear's current stock price as an appealing opportunity for investors to consider, suggesting that now is an opportune time to start building positions in anticipation of the company's positive trajectory.
InvestingPro Insights
As investors consider Benchmark's optimistic outlook for MaxLinear, real-time data and InvestingPro Tips offer a more nuanced view of the company's financial health and market sentiment. MaxLinear currently holds a market capitalization of $1.83 billion. The company's P/E ratio stands at -24.18, reflecting market skepticism about its profitability in the near term. This skepticism is echoed in the InvestingPro Tips, which highlight analysts' anticipation of a sales decline in the current year and consensus that the company may not turn a profit this year.
Despite these challenges, MaxLinear has demonstrated a strong return over the last month, with a 30.82% price total return. This aligns with the positive momentum mentioned by Benchmark and could be indicative of the market's recognition of the company's potential growth opportunities. Additionally, with an InvestingPro Fair Value estimate of $24.36, there appears to be a belief that the stock has room to grow from its previous close of $22.42.
InvestingPro Tips also note that MaxLinear's liquid assets exceed its short-term obligations, suggesting a degree of financial resilience. For investors looking for more detailed analysis and additional insights, there are more InvestingPro Tips available, which can be accessed with a subscription. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and uncover the full range of insights and data that could inform your investment decisions.
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