Hey this is tom, and if six months ago i would have came up to you and i told you hey, i got a stock that most people have never heard about. It doesn't do anything disruptive, it's very industrial and boring, but i think it will do it. 35 in six months, and luckily for you, we don't have to wait six months because i've already ran this test six months ago, sharp on january 7th. I posted a notice on our patreon group and in our channel members section, and i told you this talk is going to go ballistic.

I was speaking, of course, about a company called max linear mxl, a company. Most of you have never heard about 3.7 billion in valuation, a company that pretty much does broadband 5g 4g home connectivity, basically infrastructure industry, home stuff - that nobody really gets excited about, and i told you this 36 dollar stock is going to 45 dollars, basically giving it A huge upside - and i told you that this is gon na happen below everyone's radar. This is exactly what happened now. To be honest, i never expected this to happen so fast, but now we not only hit our target price.

We crossed it and smashed it. So the target price was 45. The stock is currently at 49, giving us 36 in six months, and now we have to talk about whether we want to stay in at this insane price of 49 or do we get out and take profits because, as you know, my methodology never changes. I always take a look at the company when i hit the target price and i make a re-evaluation whether i'm staying in or i'm selling.

It's not emotional, it's not about faith or the rain dance. It's about numbers - and this is exactly what we're going to do in this video and, as you know, the conclusion always comes first in my videos, always so the conclusion here. I think the stock has hit its ceiling. I can't see any more upside for this stock beyond these numbers, because this is already assuming quite a lot of success over the next few years, so i'm gon na be cashing out.

That's the bottom line. I don't hold you hostage, however, if you want to hear my analysis as to why i think this would happen stick around because we're going to take a look at the dcf at the management. Other analysts we're going to break down what they're saying about this company. Basically, go through the financials everything i do on this channel as far as the full due diligence - and i already told you the conclusion, but you might want to see what's the role they've taken to get to that conclusion, so you can bash me in the comment Section right, in any case, whether you stay or leave both options are fine, but i do ask you one thing: don't click, nothing, don't smash, nothing, don't buy.

Nothing! Don't subscribe to nothing, there's nothing! To sell! No courses, no affiliate links, no sponsorships just give your attention and let's get started. My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you there's one thing you need to know about me: i don't take from anybody, so this is max linear's homepage, as you can see, they do a Lot of stuff in connectivity basically connected homes, industrial projects, infrastructure, 5g. Basically, everything we thought is going to go crazy during a pandemic year, and it did so. The first thing i want to show you is the revenues and, as you can see over the course of the last 10 years, management have been killing it.

They literally 10 x. The revenues in 10 years, 72 million to 766 million in 10 years is impressive. Now this spike, though, is something that you can definitely attribute to the whole covet pandemic thing. Basically, that means that this company max linear was on the winning side of the whole pandemic trend, and now i think, that's going to mellow down a little bit looking at the balance sheet.

They have 130 million in cash, which is plenty also. The total assets are 1 billion and 26 million. If you actually take out the goodwill 300, that means they have net about 700 million and since they have 600 million in abilities, that's not amazing, but at least they're positive. The only thing is that their debt is a little bit too big for their cash position.

376 million in debt over a cash position of 130 million is a little bit problematic, but not the end of the world. And if you look at the multiples, they're quite reasonably priced at five ev to sales, which is about 11 percent overvalued eevee to ebitda current 12 months is 180 overvalued, which is a little bit on the high side. Price to sales is about nine percent of a value. So basically, if you combine all of these multiples, the company is just slightly overvalued at this price point and here's what i was talking about.

The revenue growth over the past year was 180. It's expected to go down to 43, which is still impressive, but definitely not the growth rate we saw in the pandemic year. Also, ebitda growth was 665 percent expected to go down to 48.36, so they're definitely slowing down. Since everything is reopening - and here's where the big problem is their margins is not something to write home about 53, which is the gross profit, not amazing, but you have to remember they're, not a sas company they're, actually making physical goods problem is their ebitda is 11.8, Which is quite low and their net income negative, even in this year, where they exploded out of the stratosphere 7.4 negative.

That's not good! So, first of all, this is the patreon post. I was talking about january 7th 2021. I told you: patreon is exclusive three billion company going 25 undervalued. I was talking about max linear, the price was 36 and my target was 45..

However, we've already passed that we're at almost 50 dollars, and now we got to talk about whether the price is right. For us to sell or we're sticking with max linear - and this is the chart i mentioned in the beginning of the video - where you can see every single stock i talk about this - is max linear. You can see right here january, 7th, the price, the price that i targeted and the current price, as you can see, with it 36. It's already 8 overvalued.

According to my original price, and after this video, we either gon na set a new price or leave and get out now this file is available to download for every single page in your channel member. It has the good stock, the bad stock. I don't get every single thing right. Of course, i do my own mistakes.

You can audit me every single minute if you join the patreon or the channel membership and you can access this file anytime. It's on google drive, let's move on so the first thing i like to look at as a company is what's going on with the management. Now this dude is impressed. Kishore was actually the founder of the company almost two decades ago, as you can see right here.

He founded the company in 2003. He is still the ceo 18 years later, and that is the kind of thing i want to see. A dedicated founder, ceo who's been doing it for 20 years and is still with the company, and that is exactly the kind of thing i want to see. A ceo, slash, founder, that's doing this for 20 years and not looking to cash out.

This dude is impressive. Now, if you take a look at the target prices right here, i screened the best analyst only five stars, as you can see right here and i rank them by highest to lowest. So, as you can see right here, we have ten percent undervalued, seven percent overvalued. Nine percent undervalued, seven percent of our value.

We do have a 28 under valuation by one analyst, but for the most part it's very kind of down the middle. It's either slightly overvalued or slightly undervalued. In fact, the target price that we're seeing here the overall target price is 52.78, which means it has about three more dollars to get four more dollars to give about nine to eight percent according to this website. But i do have my own opinion and my opinion is based on my dcf, which i want to show you okay.

So this is my dcf for this company. As you can see right here, i assumed 100 million dollars, capex investment, it's a company that does a lot of capital investments, because they're actually in broadband and in semiconductors, so they're doing a lot of work that requires heavy capital, expenditures, 100 million over the course of The next five years is reasonable. We have 30 growth, assuming here, not conservative 30. I want to see what we get if you have a 30 growth, which i don't think is exactly sustainable for this company also 10 discount rate 4, perpetual rate and 17, which is the ebitda multiple, and this is what we have 38.7 dollars for the perpetual approach.

51.2 dollars for the ebitda approach, and that gives us a blended rate of 45 dollars, which is slightly overvalued based on the current price. Basically, my price did not change, even though i assumed heavy growth for this company 30 per year over the course of five years. We still can't see any justification to go over 45 dollars. So for me, it's an out so, as you just saw, this 5g home connectivity play was perfect for the pandemic time.

I think now it's starting to get at ceiling. I can't see it going over 50 unless something remarkable happens, but of course it always may happen. I can't predict the future, i'm just a guy on the internet, i'm not a financial advisor. You have to do your own research, because this is my opinion.

It might be inaccurate might be wrong, might be even the ramblings of amendment. You absolutely have to do your own research, i'm not just saying this. A legit blah blah mother, effing blah a huge shout out to the channel members and the patrons. If you want access to the dcf you saw in this video, as well as the price targets for every single stock.

I talk about join my patreon. It's five bucks per month and you'll be supporting the channel. Why not i'll see you in the next video.