Reviewing MaxLinear (MXL) & Quantenna Communications (QTNA)

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MaxLinear (NYSE:MXL) and Quantenna Communications (NASDAQ:QTNA) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares MaxLinear and Quantenna Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MaxLinear -6.80% 11.90% 6.16%
Quantenna Communications 1.40% 6.77% 5.69%

Analyst Ratings

This is a breakdown of current recommendations and price targets for MaxLinear and Quantenna Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MaxLinear 0 5 2 0 2.29
Quantenna Communications 1 0 8 1 2.90

MaxLinear currently has a consensus price target of $21.83, suggesting a potential upside of 0.48%. Quantenna Communications has a consensus price target of $20.00, suggesting a potential upside of 20.70%. Given Quantenna Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Quantenna Communications is more favorable than MaxLinear.

Valuation & Earnings

This table compares MaxLinear and Quantenna Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MaxLinear $385.00 million 3.89 -$9.18 million $0.78 27.86
Quantenna Communications $220.46 million 2.81 $34.41 million $0.08 207.13

Quantenna Communications has lower revenue, but higher earnings than MaxLinear. MaxLinear is trading at a lower price-to-earnings ratio than Quantenna Communications, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

94.9% of MaxLinear shares are held by institutional investors. Comparatively, 63.3% of Quantenna Communications shares are held by institutional investors. 11.5% of MaxLinear shares are held by insiders. Comparatively, 13.5% of Quantenna Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

MaxLinear has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Quantenna Communications has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Summary

Quantenna Communications beats MaxLinear on 8 of the 15 factors compared between the two stocks.

MaxLinear Company Profile

MaxLinear, Inc. provides radio-frequency (RF), high-performance analog, and mixed-signal communications systems-on-chip solutions (SoCs) for the connected home, wired and wireless infrastructure, and industrial and multi-market applications worldwide. The company offers range of semiconductor products, such as RF receivers and RF receiver SoCs, wireless infrastructure backhaul RF receivers and modem SoCs, laser modulator drivers, transimpedance amplifiers, clock and data recovery circuits, interface solutions, power management products, and data encryption and compression products. It also provides range of electronic devices, including cable DOCSIS broadband modems and gateways; wireline connectivity devices for in-home networking applications; RF transceivers and modems; fiber-optic modules; video set-top boxes and gateways; hybrid analog and digital televisions, and direct broadcast satellite outdoor and indoor units; and power management and interface products. It sells its products to electronics distributors, module makers, original equipment manufacturers, and original design manufacturers through direct sales force, third party sales representatives, and a network of distributors. MaxLinear, Inc. was incorporated in 2003 and is headquartered in Carlsbad, California.

Quantenna Communications Company Profile

Quantenna Communications, Inc. designs, develops, and markets wireless communication solutions enabling wireless local area networking in the United States and internationally. The company's solutions portfolio comprises radio frequency chips and digital baseband chips, which support the IEEE Wi-Fi standards, including 802.11n, 802.11ac, and draft 802.11ax. It offers its products for home networking applications, including home gateways, repeaters, and set-top boxes, as well as retail, outdoor, small and medium business, enterprise, and consumer electronics applications. The company sells its Wi-Fi solutions directly to original equipment manufacturers and original design manufacturers; and third-party distributors. Quantenna Communications, Inc. was founded in 2005 and is headquartered in Fremont, California.

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