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Maxim (MXIM) Up 5.8% Since Last Earnings Report: Can It Continue?

Maxim (MXIM) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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This story originally appeared on Zacks

It has been about a month since the last earnings report for Maxim Integrated Products (MXIM). Shares have added about 5.8% in that time frame, outperforming the S&P 500.

- Zacks

Will the recent positive trend continue leading up to its next earnings release, or is Maxim due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Maxim Q4 Earnings & Revenues Beat Estimates

Maxim Integrated Products, Inc. reported fourth-quarter fiscal 2021 adjusted earnings of 91 cents per share, which beat the Zacks Consensus Estimate by 5.81%. The bottom line increased 56.9% year over year and 11% on a sequential basis.



Revenues of $719.9 million outpaced the Zacks Consensus Estimate of $687.7 million. Also, the top line increased 32.1% year over year and 8.3% on a sequential basis.



Top-line growth was primarily driven by the company’s strong performance across the automotive, industrial and consumer markets.



Analog Devices announced plans to acquire Maxim last year. In the latest quarterly release, Maxim stated that it is working on final regulatory clearance for the deal closure.

End-Market in Detail

Industrial: The company generated 34% of total revenues from the market in the reported quarter. Revenues from the market jumped21% from the prior-year quarter.



Automotive: The market accounted for 31% of fiscal fourth-quarter revenues. Revenues from the market were up 86% on a year-over-year basis.



Consumer: Maxim generated 19% revenues from the market. Revenues from the market were up 59% year over year.



Communications and Data Center: Revenues from the market, which now includes computing, accounted for 17% of the total revenues. Revenues from the market declined 15% from the year-ago quarter.

Operating Details

Non-GAAP gross margin was 67.7%, which expanded 30 basis points (bps) from the year-ago quarter.



Non-GAAP operating expenses were $195.8 million, which increased 6.9% year over year.



Operating margin was 39%, which expanded 700 bps from the year-ago quarter.

Balance Sheet & Cash Flow

As of Jun 26, 2021, cash, cash equivalents and short-term investments were $2.29 billion, up from $2.03 billion as of Mar 27, 2021.



Long-term debt was $995.5 million at the fiscal fourth-quarter end compared with $995.1 million at the third-quarter end.



In the quarter under review, cash flow from operations was $280 million, up from $271 million in the prior quarter. Further, the company utilized $20 million for capital expenditure in the fiscal fourth quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Maxim has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Maxim has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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