NEW YORK (TheStreet) -- Shares of MaxLinear(MXL) - Get Report were stumbling 20.87% to $17.34 in mid-afternoon trading on Tuesday after the Carlsbad, CA-based circuit manufacturer reduced its third quarter sales guidance after yesterday's closing bell.
MaxLinear said it sees third-quarter revenue between $94 million and $98 million, below analysts models of $104.22 million. The company lowered its guidance due to anticipated softness in its legacy video SoC shipments and softness in satellite analog channel stacking outdoor units, said MaxLinear CEO Kishore Seendripu in a statement.
For the second quarter, the company reported $101.7 million in revenue, falling just short of Wall Street's estimated $101.94 million. Earnings came in at 50 cents per share, surpassing analysts' projected 42 cents per share.
MaxLinear posted earnings of 40 cents per share and revenues of $95.19 million in the 2015 second quarter.
Despite the company's lower outlook, Deutsche Bank analysts say the post-earnings pullback serves as a buying opportunity.
"We expect MXL shares to fall under pressure tomorrow, but we also believe our estimates are now significantly de-risked and expect the co's underlying growth drivers to become increasingly apaprent heading into 2017," the firm continued in an analyst note. "We would therefore see any pullback tomorrow as a buying opportunity..."
Deutsche Bank maintained its "buy" rating on the stock and lowered its price target to $25 from $30. It foresees several downside risks to the stock, such as faster decline in legacy video SoC revenues, delayed product ramps and market share loss.
Additionally, MaxLinear announced today the launch of MxL3710, a multi-gigabit MoCA 2.5 single-chip home networking circuit. The MxL3710 allows consumers to create a reliable wired backbone LAN using existing coaxial cables.
About 8.95 million of the company's shares changed hands so far today compared to its average volume of 1.03 million shares per day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate MAXLINEAR INC as a Buy with a ratings score of B-. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
You can view the full analysis from the report here: MXL