Wednesday, July 19, 2017

Maxim Quarterly Results Thursday After Close: Bullish


Maxim Integrated (MXIM) reports quarterly results Thursday after the close with an earnings call at 5 PM EDT. We spoke with management and we were impressed. Earnings more than doubled last year and we expect 30% growth this year which may sound conservative. Our earnings for next year are $2.73 assuming another 20% growth but that could also be low. (To see our earnings models click here)
$70 Target Price Or About 50% Upside
Historically Maxim stock trades at a 25 price earnings ratio. 25 multiplied by $2.73 gives you a $68 target or almost 50% upside from here.
Fewer Competitors Driving Higher Margins
The industry has cut capacity so there are fewer players with less competition leaving the remaining players with very high margins. Business has been picking up for a few quarters industry wide so the pick up with high margins flows to higher earnings.
Maxim Aligned With Technology Winners
While Tesla TSLA and NVIDIA NVDA aren't their largest customers, Maxim is positioned alongside them. NVIDIA is only about 3% of their business but as NVIDIA grows (which we are very excited about) Maxim will participate. 
Maxim also appears more aligned with Amazon AMZN than the competition. Amazon is accelerating their Internet-of-Things business right now which Maxim sells into. That ramp for Amazon happens now which can help Maxim's earnings near term. 
Earnings Reaction Is Typically Good
We love that Maxim has a history of being up after they report. 70% of the time the stock is higher after earnings results are reported.  That means the company impresses the Street.

We like it. Any questions or comments, let us know.

By: Chaim Siegel, Elazar Advisors, LLC, Happy and profitable trading! 


You didn't sign up for our free email alerts yet?
Enter your email address:


Delivered by FeedBurner
Disclaimer: Stocks reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. Ratings are based on hypothetical trade directions. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks.

No comments:

Post a Comment

Comment here: