MXL
MaxLinear, Inc.
$99.16
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 305.7% above fair value
You pay
$99.16
Bear
$17.95
Fair
$24.44
Bull
$30.94
Bear
$17.95
-81.9%
$1.00 × 12x + net cash
Fair
$24.44
-75.4%
$1.00 × 16x + net cash
Bull
$30.94
-68.8%
$1.00 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.00)
Implied Market Multiple
99.5x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $52.71 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $24.44 per share.
Warnings
Price-to-book value of 105.2x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $52.71 (from 17 analysts). Our estimate is 72% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing