Why MaxLinear Shares Went Parabolic Today

Why MaxLinear Shares Went Parabolic Today

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.

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

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