When Should You Buy MaxLinear, Inc. (NASDAQ:MXL)?

MaxLinear, Inc. (NASDAQ:MXL), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$43.24 at one point, and dropping to the lows of US$32.30. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether MaxLinear's current trading price of US$33.90 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MaxLinear’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for MaxLinear

What's The Opportunity In MaxLinear?

Great news for investors – MaxLinear is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $56.00, but it is currently trading at US$33.90 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because MaxLinear’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will MaxLinear generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. MaxLinear's earnings over the next few years are expected to increase by 71%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since MXL is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MXL for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MXL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you'd like to know more about MaxLinear as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for MaxLinear you should know about.

If you are no longer interested in MaxLinear, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.