MaxLinear Q3 Earnings: Can NYSE:MXL Hit Its $0.30 EPS Target?

in EARNINGS/INVESTING IDEAS by

MaxLinear, Inc. (NYSE:MXL) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.30/share on revenue of $153.5 million. The consensus earnings per share (EPS) of $0.30/share is based on a poll of 9 analysts and represents a growth in eps of 32.5% over the same quarter last year, when the company reported earnings of $0.23/share.

The revenue forecast of $153.5 million based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 91.8%. Last year the company reported $80.02 million in revenue for the quarter.

Expected to report EPS growth of 32.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $153.50 $80.02 91.8%
EPS $0.30 $0.23 32.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and met expectations 3 quarters.

What are your expectations from MaxLinear, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.08 $0.09 7.6% Beat
Q1, 2020 $0.07 $0.07 0% Met
Q4, 2019 $0.16 $0.16 0% Met
Q3, 2019 $0.21 $0.23 8.8% Beat
Q2, 2019 $0.21 $0.22 5.9% Beat
Q1, 2019 $0.19 $0.19 0% Met
Q4, 2018 $0.19 $0.20 6.0% Beat
Q3, 2018 $0.18 $0.19 7.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $26.65 $26.30 −1.3% Decline
April 29, 2020 $16.47 $16.49 0.1% Increase
February 5, 2020 $19.03 $18.21 −4.3% Decline
October 24, 2019 $21.81 $18.73 −14.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.54, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.54 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

MaxLinear, Inc. is currently trading at $25.15/share, down −4.6% for the day. The company is trading at approximately 89.2% of its 52-week high of $28.36/share. The company’s stock price is down −4.4% since the last earnings report and up 7.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 60.33 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MXL Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −37.31 and a forward P/E multiple of 33.66.

MaxLinear, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.65. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $25.15
P/E Ratio −37.3x
P/E Ratio (Fwd) 33.7x
PEG Ratio 0.3
Total Debt / Total Capital 10.1%
Levered Free Cash Flow $56.623 million
EV / EBITDA 140.6x

Finbox

MaxLinear, Inc. is a small-cap stock with a market capitalization of $1.955 billion and a total enterprise value of $2.067 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

MaxLinear, Inc. provides radio-frequency (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. The company offers various semiconductor products, such as RF receivers and RF receiver SoCs, wireless infrastructure backhaul RF receivers and modem SoCs, laser modulator drivers, transimpedance amplifiers, clock and data recovery circuits, interface solutions, power management products, and data encryption and compression products. Its products are used in a range of electronic devices, including cable DOCSIS broadband modems and gateways, wireline connectivity devices for in-home networking applications, RF transceivers and modems, 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 sells its products to electronics distributors, module makers, original equipment manufacturers, and original design manufacturers through direct sales force, third party sales representatives, and a network of distributors. MaxLinear, Inc. was founded in 2003 and is headquartered in Carlsbad, California.

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