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Maxwell to Gain From Energy Storage Portfolio Optimization

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We recently issued an updated research report on Maxwell Technologies Inc. (MXWL - Free Report) . The company incurred third-quarter 2018 adjusted loss of 16 cents per share, narrower than the Zacks Consensus Estimate of 18 cents. However, on a year-over-year basis, the bottom line widened from the year-ago loss of 13 cents per share.

Maxwell expects its energy storage product line and current pipeline of utility-scale grade projects to boost growth in 2019-2020.

What’s Driving the Stock?

Maxwell is currently witnessing a rise in demand for its ultra-capacitor solutions and applications, autonomous driving, and E-active suspension. Additionally, the company aims at optimizing its energy storage portfolio to drive business diversification and directing its business to higher growth opportunities in a growing addressable market, worth $1.4 billion, by 2022.

In May 2018, Maxwell entered into a technology partnership with Chinese automotive company named Geely for enhancing its automotive energy storage portfolio. The partnership is expected to generate meaningful additional top-line revenues for the company in 2020, amounting to more than $100 million of life-time revenues.

Also, Maxwell is all set to start full-scale production of its lithium-ion capacitor with its partner, China Railway Rolling Rock Corporation (CRRC-SRI). Inevitably, this reflects solid growth opportunities for Maxwell in the Chinese rail market.

However, Maxwell is witnessing significant competition and pricing pressure in the Chinese hybrid transit vehicle market, which has historically contributed a significant portion of its revenues. This rising pressure is attributable to the increased competition from local Chinese competitors.

Estimates for Maxwell have been revised downward over the past 30 days. Notably, the company’s bottom line surpassed the consensus mark only once in the trailing four quarters, with average negative surprise of 6.67%.

Maxwell Technologies, Inc. Price and Consensus

Maxwell Technologies, Inc. Price and Consensus | Maxwell Technologies, Inc. Quote

Zacks Rank and Key Picks

Maxwell Technologies currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same space are AU Optronics Corp (AUO - Free Report) , AVX Corporation (AVX - Free Report) and Kemet Corporation (KEM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AU Optronics delivered average positive earnings surprise of 141.07% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 110.5% upward to 40 cents over the past 90 days.

AVX Corporation pulled off average earnings surprise of 33.96% over the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has been raised 11.6% to $1.44 over the past 90 days.

Kemet came up with average beat of 30.59% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings has been raised 34.1% to $3.34 over the past 90 days.

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