Needham & Company Reiterates Buy on MaxLinear (MXL) Following 2Q Report
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Needham & Company reiterated a Buy rating and $21.00 price target on MaxLinear (NYSE: MXL) following the company's 2Q earnings report. MXL reported 2Q16 revenue and NG EPS of $101.7MM/$0.50, vs. consensus' $102.0MM/$0.44 estimates. 3Q16 revenue is expected to be $94-98MM, well below $104MM estimates.
Analyst Quinn Bolton commented, "MXL reported better than expected NG EPS in 2Q16 but issued conservative 3Q16 guidance after four strong quarters. The company's outlook was largely impacted by seasonality in its core operator business and reduced visibility for channel stackers at DirectTV as the service provider plans a hard cutover from analog to digital in 4Q16/1Q17. We were further disappointed by the faster than expected decline of the company's legacy video SoC business. With legacy Entropic revenue falling off faster than expected, it will provide less cash for harvesting and investing purposes. Reflecting guidance, we lower our 2016 and 2017 estimates but maintain our Buy rating and $21 price target as we believe the core operator and infrastructure business, which is growing, deserves a higher multiple of 15x vs. 12x."
Shares of MaxLinear closed at $21.90 yesterday.
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