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Analyst Blog

We have maintained our Outperform recommendation on Maxwell Technologies, Inc. (MXWL - Analyst Report) on Jun 25, 2013.

Why the Reiteration?

Maxwell Technologies continues to be the market leader in the growing ultracapacitor market. The company recorded consistent growth in its top-line over the last three years.

Looking ahead, we expect the trend to continue with demand for the company’s products in utility infrastructure, renewable energy, and space programs. Also, its key end-markets are likely to benefit from government stimulus programs as well as more stringent automotive emissions legislation.

Despite the recent notification letter from NASDAQ that the company is not in compliance with NASDAQ Listing Rule 5250, we remain optimistic as the company continues to monitor ultracapacitor demand indications and intends to adjust its operating plans accordingly.

The company is installing an ultracapacitor electrode fabrication line in the company's 123,000 square-foot leased facility in Peoria, Ariz. It expects this to double the current electrode production capacity, once it comes online this year.

Going forward, we expect the growth for Maxwell Technologies to be powered by sales of ultra capacitors to support efficient, cost-effective energy storage for recuperative braking systems in low-emission, hybrid electric transit buses, zero-emission electric rail vehicles and wind turbine blade fit systems.

Also, we are encouraged by the company’s strong balance sheet with a low long-term debt-to-capitalization of 2.6% as compared to the Zacks Industry Average of 32.4%.

Other Stocks to Consider

Maxwell Technologies currently has a Zacks Rank #1 (Strong Buy). Other stocks that are also well placed in the space are LightPath Technologies, Inc. (LPTH), Stoneridge Inc. (SRI - Snapshot Report) and AU Optronics Corp. (AUO - Snapshot Report). While LightPath Technologies and Stoneridge Inc. carry a Zacks Rank #1 (Strong Buy), AU Optronics Corp. carries a Zacks Rank #2 (Buy).

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