MRVL - MaxLinear Is Beaten Down For A Reason But Still Worth Watching
2024-06-18 11:10:49 ET
Summary
- MaxLinear has been hammered by end-market demand erosion and severe inventory corrections across many of its end-markets.
- Management continues to talk up its opportunities in data center interconnect, and the Street is looking for a big revenue jump in 2025, but the company hasn't delivered here yet.
- The Broadband segment is likely to continue struggling with poor underlying demand drivers and there is a risk of a meaningful customer loss.
- Opportunities like 2.5G Ethernet, data storage acceleration, mmWave, and wireless backhaul could be underrated drivers over the next 12-18 months, and could get the company back to high-teens margins.
- This is a name to watch as a turnaround idea, and it could get some AI hype, but inconsistent execution is an issue not to be ignored.
If there is any bright side to MaxLinear ’s ( MXL ) performance over the past year and a half, apart from the idea that the business and expectations should pretty well be washed out now, it is that it serves a good reminder that valuation alone isn’t a good enough reason to like a stock....
MaxLinear Is Beaten Down For A Reason, But Still Worth Watching