Why MaxLinear Shares Went Parabolic Today

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MaxLinear have been rising throughout the day, and currently sit on an 18% gain after investors responded in an overwhelmingly positive way to the company's strong second-quarter earnings report released yesterday afternoon.

So what: MaxLinear's revenue came in at $29.8 million for the second quarter, a 22% year-over-year improvement and ahead of the $28.5 million Wall Street consensus. Earnings of $0.11 per share trounced the Street's $0.06 consensus. MaxLinear now expects revenue in the $31 million to $32 million range for the third quarter, which is a much smaller year-over-year increase (between 4% and 7%).

Now what: Investors have been excited about this stock all year, but today's pop only puts the exclamation point on that interest. MaxLinear's shares have gained 60% since the start of 2013, which is far better than the 6% growth in trailing-12-month revenue that the company has recorded over the same period. Tread carefully here. The market might be getting a little ahead of itself.

Want more news and updates? Add MaxLinear to your watchlist now.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why MaxLinear Shares Went Parabolic Today originally appeared on Fool.com.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading