Mellanox stock: buy or sell?

MLNX stock price: $119.84 0.90% At close on April 6th, 2020

Updated on:
April 6th, 2020

4

Shares of Mellanox Technologies appreciated a slightly fine 0.90% and closed at $119.84.

Mellanox Technologies, Ltd., a fabless semiconductor company, designs, manufactures, and sells interconnect products and solutions worldwide.

Should I buy Mellanox stock?

Make a decision about when to buy or sell stocks is one of the hardest parts of being a trader or investor. That's why is so important to choose your own trading strategy that matches with your character as inversor. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best.

None of our preferred buy setups matches with Mellanox Technologies stock situation right now, therefore this is not a suitable entry point.

Buy setupElegible
New all-time highNo
New 52 week highNo
Price crossing up 200d MANo
100d MA crossing up 200d MANo
This doesn't mean MLNX will fall in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems.

Is Mellanox stock a buy?

Banks and financial institutions post stock ratings everyday. Unfortunately, we couldn't detect any rating for MLNX stock for the last month.

Mellanox stock analysis

Daily outlook

Mellanox shares appreciated 0.90% to $119.84 today.

Mellanox closed today at $119.84 and appreciated a slightly fine 0.90%. Since price and SMA200d lines crossed up on March 24th, MLNX climbed $11.17 (10.28%). On January, SMA100d and SMA200d crossed up triggering a rise of 0.05%. From a daily outlook perspective, MLNX is drawing an uptrend of rising tops and rising bottoms. Since its last top on Tuesday at $121.87, price slid and found support around $118.59. Breaking down under $118.59 would cancel the current uptrend and it might slide further to test lower supports. Note that $121.87 might act as a resistance line. Trading the long side, we should wait to a new breakout over $121.87 to find the next buy point. On February, MLNX hit a new all time high, pushing higher than on February tops. Check different trading setups that use ATHs as triggers.

MLNX stock chart (daily)

Weekly outlook

Mellanox Technologies shares appreciated 0.90% this week, ending at $119.84. Late March MLNX skyrocketed an amazing 11.09% in just one week. Early March MLNX plunged a spooky -6.77% in just one week.

Mellanox Technologies is in a glaring downtrend, marking consecutive falling peaks and bottoms. Now is trading in between the - range. If the support holds the price, this might mark a double bottom shape and create a flat-base to reverse this downtrend. Not so far away is the last all-time high Mellanox marked by mid February. Late March MLNX price bounced up over the SMA of 40 weeks that acted as support stopping new slides. Since early January when SMA20w and SMA40w crossed up, MLNX price gained $2.29 per share (1.95%).

MLNX stock chart (weekly)

Mellanox stock price history

Mellanox IPO was on February 8th, 2007 at $20.00 per share1. Since then, MLNX stock surged a 499.20%, with a yearly average of 38.40%. If you had invested right after MLNX's IPO a $1,000 in Mellanox stock in 2007, it would worth $4,992.00 today.

1: Adjusted price after possible price splits or reverse-splits.

Mellanox stock historical price chart

MLNX stock reached all-time highs on February with a price of $123.79.

Mellanox stock price target

Nobody can reliably foresee how stock prices may evolve in the future. However, banks and other financial institutions analysts, with the help of lots of data and algorithms do their best to predict the stock prices movement. We do not recommend to follow these stock price predictions without a critical thinking from your side, as their accuracy is usually low. For the last month we have not found any price target for Mellanox Technologies stock by any trusted analyst.

Financials and fundamental analysis

Earnings date and Earnings per Share

Since last April, when Mellanox Technologies posted its last earnings report, it . As soon as we get its posted EPS from the earnings report, we will extend this report.
MLNX earnings date and EPS evolution
QuarterReporting dateEstimated EPSActual EPSSurprise
2017-Q2-n/a-0.16n/a
2017-Q32017-10-250.640.7110.9%
2017-Q42018-01-180.680.8220.6%
2018-Q12018-04-170.530.732.1%
2018-Q22018-07-170.791.0330.4%
2018-Q32018-10-240.860.9611.6%
2018-Q42019-01-300.931.0310.8%
2019-Q12019-04-171.44n/an/a
2019-Q2-n/an/an/a
2019-Q3-n/an/an/a

Annual financial results

Compared to 2017, last anual revenues report draw an exceptional growth of 26.03% to $1,088.74 million USD. When comparing 2018 vs 2017, similarly, profit margin (that is, the net income divided by revenues) rocketed a 14.58% to 12.33%.

Mellanox presents anual results in December, and to compare its evolution since then, we estimate annual sales and income figures by adding results from the last 4 quarters. This is called TTM (or Twelve Trailing Months). So, Mellanox TTM sales up to March 2019 were $1,142.96 and income $145.04 M USD. If we compare this TTM figures with the last reported annuality, we can review Mellanox business evolution since December 2018: Annual sales up to March, compared to lastest yearly report, stepped up a decent 4.98%. However, profit margin (net income/sales) remained stable at 12.33%.

MLNX annual Sales and Income evolution
YearSalesYoYIncome/(margin)YoY
2013$390 M-$-23.34 M-6.0%-
2014$464 M18.75%$-24.01 M-5.2%2.87%
2015$658 M41.95%$93 M14.1%-486.91%
2016$857 M30.29%$19 M2.2%-80.07%
2017$864 M0.75%$-19.43 M-2.2%-204.90%
2018$1,089 M26.03%$134 M12.3%-791.16%
TTM $1,143 M4.98%$145 M12.7%8.03%

Quarterly financial results

Mellanox reported $305.22 M in revenues for 2019-Q1, a 5.22% improvement compared to previous quarter. Reported quarter income marked $48.62 million with a profit margin of 15.93%. Profit margin inched a 1.16% compared to previous quarter when profit margin was 14.77%. When comparing revenues to same quarter last year, Mellanox Technologies sales marked an extraordinary increase and boosted a 21.60%. Looking back to recent quarterly results, Mellanox posted 7 positive quarters in a row.
MLNX quarterly Sales and Income evolution
QuarterSales1QoQ2Income1/(margin)QoQ2
2017-Q2$212 M-$-8 M-3.8%-
2017-Q3$226 M6.48%$3 M1.5%-142.55%
2017-Q4$238 M5.26%$-3 M-1.1%-176.26%
2018-Q1$251 M5.65%$38 M15.1%-1,559.43%
2018-Q2$268 M6.96%$17 M6.2%-56.33%
2018-Q3$279 M4.00%$37 M13.3%124.23%
2018-Q4$290 M3.89%$43 M14.8%15.58%
2019-Q1$305 M5.22%$49 M15.9%13.51%

Mellanox ownership

When you are planning to invest in a stock, it's always worth to check its ownership structure.

Management staff in all public traded companies that hold equity is required to report every transaction to the SEC. For Mellanox, 5.03% of all outstanding shares are owned by its staff.

In case of Mellanox Technologies stock, 73.49% of its shares are held by institutions (mutual funds, pension funds, big banks and other large financial institutions). Bearish positions for MLNX stock account 0.00%, no big difference from last month.

The following table compares ownership indicators for other stocks related to Mellanox:

MLNX
Market cap$6.7 B
Total shares56.1 M
Float shares53.7 M
  - Institutional holdings (%)73.5%
  - Insider holdings (%)5.0%
Shares in short selling0.0%

Mellanox summary

Monday, April 6th, 2020
Open$119.64
Close$119.84
Day range$119.47 - $120.52
Previous close$118.77
Session gain0.90%
Average true range$3.98
50d mov avg$117.36
100d mov avg$116.94
200d mov avg$113.86
Daily patternlb03a
Weekly pattern lt02a

Mellanox performance

Stocks performance is always measured in comparision to the market or competitors and related stocks in the same industry. We picked as the bechmarking frame for Mellanox stock.
Stock3m6m12m
MLNXMellanox Technolo...0.80%8.41%0.48%

Mellanox competitors

Unfortunately, we could not find any public company that could be defined as Mellanox competitor. This doesn't mean Mellanox does not have any competitor in the market, it's just we could not detected it.