MaxLinear Stock Plummets 32% After Announcing Acquisition of Silicon Motion
January 16, 2023
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Maxlinear Intrinsic Value – MAXLINEAR ($NASDAQ:MXL): MaxLinear is a provider of analog, digital and mixed-signal integrated circuits for a wide range of applications. On May 5, 2022, MaxLinear announced its plan to acquire Silicon Motion, a designer and manufacturer of embedded controllers for SSDs and other storage solutions. The acquisition would have allowed MaxLinear to expand its product portfolio and reach new markets. Unfortunately, investors have responded negatively to the proposed acquisition. Since the announcement, MaxLinear’s stock has plummeted by 32%, dragging the company into a bear market. This is significantly steeper than the decline of other semiconductor stocks in the same period.
The decline in MaxLinear’s stock can also be attributed to other factors such as weakening semiconductor markets and decreasing earnings. Some analysts have expressed concern that the acquisition could be too costly for MaxLinear and may not yield the desired returns. MaxLinear will need to address these concerns if it hopes to turn around its stock price. The company must demonstrate that the acquisition is a sound strategic move that will benefit shareholders in the long run. Only then can investors be convinced that the proposed transaction is a good deal for all parties involved.
Stock Price
MaxLinear, Inc., a leading provider of radio-frequency and mixed-signal integrated circuits for the connected home, announced on Friday the acquisition of Silicon Motion Technology Corporation. The news came as a shock to the market, and the stock immediately plummeted by 32%. Although the media had largely been positive about the deal, investors seemed to be concerned about the potential risks of the acquisition. MaxLinear’s stock opened on Friday at $36.5 and closed at $37.0, down by 0.2% from its last closing price of 37.0. The sudden drop in stock price came as a surprise to many analysts, who had expected the stock to rise in anticipation of the acquisition. The combination of MaxLinear and Silicon Motion will create a world-leading provider of radio-frequency and mixed-signal integrated circuits for the connected home, further strengthening MaxLinear’s position in the market.
However, some investors are concerned that the acquisition could lead to an over-leveraged balance sheet and an increase in debt levels.
In addition, there is concern that the two companies may not be able to realize the expected synergies quickly enough to offset the costs of the acquisition. The acquisition is seen by some as an opportunity for MaxLinear to diversify its product offerings and expand its market share. However, despite these potential benefits, investors remain cautious as they monitor the situation closely to assess the potential risks associated with the deal. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Maxlinear. More…
| Total Revenues | Net Income | Net Margin |
| 1.08k | 122.14 | 11.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Maxlinear. More…
| Operations | Investing | Financing |
| 335.4 | -92.6 | -226.83 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Maxlinear. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.18k | 566.82 | 7.84 |
Key Ratios Snapshot
Some of the financial key ratios for Maxlinear are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 47.6% | – | 15.9% |
| FCF Margin | ROE | ROA |
| 26.6% | 18.1% | 9.1% |
VI Analysis – Maxlinear Intrinsic Value Calculator
MAXLINEAR is a company that has strong fundamentals, making it a great long term investment. According to the VI Line app, the fair value of MAXLINEAR’s share is around $55.6, however as of now, the stock price is only at $37.0. This discrepancy reveals that MAXLINEAR is trading at 33% below its fair value, making it an excellent opportunity for potential investors. The app also provides a comprehensive analysis of MAXLINEAR’s fundamentals, including an analysis of the company’s financials, operations, and management. This allows potential investors to make a well-informed decision about investing in MAXLINEAR. Additionally, VI Line also provides guidance and advice on how to maximize returns when investing in MAXLINEAR. Overall, MAXLINEAR is an excellent long-term investment opportunity with strong fundamentals and a stock price that is undervalued by 33%. With the help of the VI Line app, investors can make an informed decision and maximize their returns. More…
VI Peers
MaxLinear Inc is a leading provider of high-performance radio-frequency (RF), analog, and mixed-signal integrated circuits (ICs) for the cable television (CATV), satellite, terrestrial, and fiber-to-the-home (FTTH) markets. The company’s products are used in a wide variety of end applications including cable and satellite set-top boxes, cable modems, optical network terminals, routers, and gateways. MaxLinear is headquartered in Carlsbad, California.
MaxLinear’s competitors include Applied Optoelectronics Inc, Realtek Semiconductor Corp, and TranSwitch Corp. These companies are also leading providers of high-performance RF, analog, and mixed-signal ICs.
– Applied Optoelectronics Inc ($NASDAQ:AAOI)
Applied Optoelectronics Inc. is a vertically integrated provider of LED solutions for lighting, display and optical communications applications. The company designs, manufactures and markets a broad range of high-performance light emitting diodes (LEDs), laser diodes, photodiodes and optoelectronics products.
The company’s products are used in a variety of applications including indoor and outdoor lighting, automotive, electronics, signs and displays, and communications.
Applied Optoelectronics Inc has a market cap of 81.42M as of 2022. The company’s return on equity is -24.05%.
The company’s products are used in a variety of applications including indoor and outdoor lighting, automotive, electronics, signs and displays, and communications.
– Realtek Semiconductor Corp ($TWSE:2379)
With a market cap of 129.24B as of 2022, Realtek Semiconductor Corp is a company that designs, manufactures and markets a wide variety of semiconductor products. Its products include communications network ICs, computer peripheral ICs, and multimedia ICs. The company’s return on equity is 29.82%. Realtek has a long history of innovation and is one of the leading IC providers in the world. The company’s products are used in a wide range of applications, including communication networks, computers, and multimedia devices.
– TranSwitch Corp ($OTCPK:TXCCQ)
TranSwitch Corporation is a publicly traded company that designs, develops and markets integrated circuit solutions for the networking, communications and consumer electronics markets. Its products enable voice, video and data communications over converged Internet Protocol (IP) networks. The company’s solutions are used in a variety of end-user applications, including broadband access, set-top boxes, routers, switches, base stations, wireless LANs, VoIP phones and HDTVs.
Summary
Investing in MaxLinear can be a risky endeavor as the stock price has recently dropped by 32% following the announcement of an acquisition of Silicon Motion.
However, overall media sentiment has been largely positive. Analysts suggest that the recent dip may be an opportunity to buy in at a lower price, as long-term investors should consider the potential growth and value of MaxLinear after the acquisition. It is important for investors to conduct their own research to get a better understanding of the company’s performance and prospects before investing. This includes looking at financial reports, analyzing market trends, and assessing the competitive landscape.
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