MaxLinear Looks More Interesting As It Refocuses On An Area Of Strength

I had mixed feelings on MaxLinear (MXL) back in December, with most of my concerns involving valuation and the company’s real competitive position in PAM4 relative to Inphi (IPHI) and Broadcom (AVGO), and the shares haven’t had a great run since then, lagging the SOX index by more than 20%, trailing Broadcom slightly, and getting left in the dust by the runaway train that is Inphi these days.

Now MaxLinear’s situation is a little different, with the upcoming acquisition of Intel’s (INTC) Home Gateway business reducing some of the execution risk I saw, but also limiting upside from data center and 5G exposure.

I don’t love this business, but it does screen as one of the cheaper names that I follow. Moreover, I’ve seen more than a few smaller semiconductor companies do well by focusing on slower-growing markets that larger competitors have largely abandoned. All in all, then, while I have some concerns about the ongoing underperformance in Infrastructure and Industrial here, I think there’s enough undervaluation to be worth a look.

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MaxLinear Looks More Interesting As It Refocuses On An Area Of Strength