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Maxwell Shareholders Could Finally See Some Rewards For Their Patience

Stephen Simpson profile picture
Stephen Simpson


  • Maxwell has had a difficult time generating consistent revenue, but upcoming launches in the auto, grid, and rail markets should put the company on a track toward double-digit revenue growth.
  • Maxwell's dry battery technology is an exciting call option that could position the company as a player in one of the biggest cost drivers for electric vehicles.
  • Modeling and valuing Maxwell involves a lot more guesswork than normal, but today's price seems to offer double-digit annual return potential.

Maxwell Technologies (NASDAQ:MXWL) hasn't been the easiest stock to hold over the last few years, as the promise of the company's ultracapacitor and dry battery electrode technology has been offset by significant revenue volatility and numerous false starts in what were supposed to be exciting growth markets. With all of that, the shares have lost about 20% of their value over the last three years and have spent most of the last year between $5.50 and $6 (with excursions down to $4.50 and up to $6.50 along the way).

Maxwell remains a tough stock to value, as there is little more to go on than a handful of design wins and potential end-market developments. That said, I think the company deserves more credit than it gets for "keeping the lights on" and using opportunities like the Chinese hybrid bus market to fund R&D and product development in areas like auto electrification, renewables, mass transit, and grid management that could start to pay off in the next couple of years.

The Auto Opportunity Is Starting To Take Shape

Maxwell management has long talked up the potential for the company's ultracapacitor products to play a meaningful role in the emerging electrification of passenger vehicles. I'm not talking specifically about electric vehicles (though that is a part of it), but rather the wider adoption of electricity-driven features/systems like stop/start motors, electronic active suspension, electronic supercharging, brake recuperation, energy storage, and various power assist systems.

Maxwell has had some design wins in the start/stop segment for some time, helping build a small toehold for the company in the auto market. Along the way, the company added some high-end business with electronic stabilization, and now, the company is looking at 14 design wins in stabilization and ADAS backup ramping up relatively soon and the possibility of additional new OEM awards

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Analyst’s Disclosure: I am/we are long ABB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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