MaxLinear, Inc. (NASDAQ:MXL) Analysts Just Slashed This Year's Revenue Estimates By 15%

The analysts covering MaxLinear, Inc. (NASDAQ:MXL) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the ten analysts covering MaxLinear, is for revenues of US$372m in 2024, which would reflect a definite 17% reduction in MaxLinear's sales over the past 12 months. Per-share losses are expected to creep up to US$2.38. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$437m and losses of US$2.29 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for MaxLinear

The consensus price target fell 12% to US$22.60, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that MaxLinear's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at MaxLinear. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that MaxLinear's revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of MaxLinear's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of MaxLinear going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple MaxLinear analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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