Home Debt obligation MaxLinear, Inc. (NYSE: MXL) could be less than a year away from...

MaxLinear, Inc. (NYSE: MXL) could be less than a year away from profitability


We think now is the right time to analyze MaxLinear, Inc. (NYSE: MXL) because it looks like the company is on the cusp of a huge accomplishment. MaxLinear, Inc. provides high-performance radio frequency (RF), analog, and mixed-signal system-on-chip (SoC) solutions for the connected home, wired and wireless infrastructure, and industrial and multi-market applications in the whole world. The US $ 3.7 billion market-capitalization company recorded a loss in its last year of US $ 99 million and a last year-over-year loss of US $ 57 million, narrowing the gap between the loss and the breakeven point. The most pressing concern for investors is MaxLinear’s path to profitability – when will it break even? In this article, we’ll discuss the company’s growth expectations and when analysts expect it to become profitable.

See our latest review for MaxLinear

MaxLinear is close to breaking even, according to 11 American Semiconductor analysts. They expect the company to make a terminal loss in 2020, before making a profit of $ 28 million in 2021. The company should therefore break even in a year or less! How fast will the business need to grow to achieve consensus estimates of equilibrium in less than 12 months? Using a line of best fit, we calculated an average annual growth rate of 60%, which is extremely strong. If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

NYSE: MXL Earnings Per Share Growth Oct 5, 2021

The developments underlying MaxLinear’s growth are not the focus of this general overview, however, keep in mind that a high growth rate is usually not unusual, especially when a business is in a period. investment.

One thing we would like to highlight with MaxLinear is its relatively high level of debt. As a general rule of thumb, debt should not exceed 40% of your equity, which in the case of MaxLinear is 80%. Note that higher debt increases the risk of investing in the loss-making business.

Next steps:

There are some fundamentals of MaxLinear that are not covered in this article, but we have to stress again that this is just a basic overview. For a more complete overview of MaxLinear, check out MaxLinear’s company page on Simply Wall St. We’ve also put together a list of key factors you should look at in more detail:

  1. Evaluation: What is MaxLinear worth today? Has the potential for future growth already been factored into the price? The intrinsic value infographic in our free research report helps to visualize whether MaxLinear is currently poorly valued by the market.
  2. Management team: An experienced management team at the helm increases our confidence in the company – take a look at the MaxLinear board members and the CEO’s background.
  3. Other high performing stocks: Are there other stocks that offer better prospects with a proven track record? Check out our free list of these great stocks here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

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