Needham analyst Quinn Bolton has maintained their bullish stance on MTSI stock, giving a Buy rating today.
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Quinn Bolton has given his Buy rating due to a combination of factors that highlight MACOM Technology Solutions Holdings’ potential for growth and recovery. Despite the pressure on gross margins from the early transfer of the RTP fab, the company has managed to exceed estimates, indicating strong operational capabilities. The assumption of control over the RTP fab ahead of schedule is expected to initially impact margins negatively, but improvements are anticipated in the following quarters, with a target to reach approximately 59% by the end of FY26.
Another factor contributing to the Buy rating is the expected growth in the Data Center segment, projected to increase by 48% year-over-year in FY25. Additionally, the company has secured its first customer for LPO production, signaling future revenue opportunities. Although the Telecom segment surpassed expectations in the third quarter, a quarter-over-quarter decline is anticipated in the fourth quarter, which management suggests is not a long-term concern. The 12-month price target remains at $150, reflecting confidence in the company’s strategic direction and financial outlook.
Bolton covers the Technology sector, focusing on stocks such as IonQ, D-Wave Quantum, and MACOM Technology Solutions Holdings. According to TipRanks, Bolton has an average return of 24.0% and a 53.52% success rate on recommended stocks.