Seeking Alpha: Maxwell's Road Still Bumpy, But Seems To Be Leading Somewhere

Maxwell (NASDAQ:MXWL) continues to be an exasperating story. On one hand, it's one of the only real ultracapacitor companies out there (let alone one of the only investable ones) and the company has scored wins with legitimate companies like Continental AG (OTCPK:CTTAY) and PACCAR (NASDAQ:PCAR). On the other hand, the company's excessive reliance on the heavily-subsidized Chinese bus and wind power markets has created a lot of volatility and left it exposed to intense price competition.

There is a very real chance that Maxwell could log three straight years of revenue contraction before seeing growth again in 2017, and that's hardly consistent with a traditional growth story. On the other hand, truck and passenger car manufacturers do seem to be increasingly interested in Maxwell's ultracapacitor technology and these two markets could drive meaningful future growth. A potentially sharp downturn in the Chinese bus opportunity over the next couple of years leads me to cut my fair value slightly and I'm not sure there's enough upside today to be worth the risk, but management's efforts to simultaneously sign up new OEM customers and improve margins could start paying off significantly in a couple of years.

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Maxwell's Road Still Bumpy, But Seems To Be Leading Somewhere