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MACOM Technology Solutions Holdings Inc (MTSI)
NASDAQ:MTSI
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MACOM Technology Solutions Holdings
(NASDAQ:MTSI)
Rating:70Outperform
Price Target:
$151.00
▲(7.34%Upside)
Positive Factors
Data Center Growth
Data center remained the standout, tracking well ahead on an accelerating pace in deployments of latest generation high speed connectivity solutions.
Record Performance
Macom Technology Solutions has record revenue and bookings, with strengthening opportunities in data centers and telecom.
Negative Factors
Gross Margin Pressure
Gross margin was once again the only potential negative largely driven by under absorption in the Lowell fab, which should rebound once demand improves in the traditional Industrial markets and mix becomes more favorable.
Industrial Demand Weakness
Weak end demand in Industrial and parts of Telecom, and a lull before renewal of a radar contract are all contributors to the overhang on GM.
MACOM Technology Solutions Holdings (MTSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.47B
Dividend YieldN/A
Average Volume (3M)628.60K
Price to Earnings (P/E)138.5
Beta (1Y)1.61
Revenue Growth32.63%
EPS Growth-233.25%
CountryUS
Employees1,700
SectorTechnology
Sector Strength87
IndustrySemiconductors
Share Statistics
EPS (TTM)0.85
Shares Outstanding74,390,670
10 Day Avg. Volume785,767
30 Day Avg. Volume628,595
Financial Highlights & Ratios
PEG Ratio-13.22
Price to Book (P/B)8.47
Price to Sales (P/S)0.00
P/FCF Ratio53.49
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue3.49
Enterprise Value/Gross Profit23.43
Enterprise Value/Ebitda46.49
Forecast
1Y Price Target
$148.60Price Target Upside5.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
MACOM Technology Solutions Holdings Business Overview & Revenue Model
Company DescriptionMACOM Technology Solutions Holdings, Inc. (MTSI) is a leading supplier of high-performance radio frequency (RF), microwave, millimeterwave, and lightwave semiconductor products. The company serves diverse markets, including data centers, telecommunications, industrial, aerospace, and defense. MACOM provides a comprehensive portfolio of products that enable the next generation of internet and communication technologies, including RF power amplifiers, diodes, mixers, and photonic solutions.
How the Company Makes MoneyMACOM Technology Solutions generates revenue primarily through the sale of its semiconductor products to original equipment manufacturers (OEMs), distributors, and contract manufacturers across various sectors. Key revenue streams include sales of RF and microwave products for telecommunications infrastructure, including mobile networks and satellite communications. The company also earns from its lightwave components, which are essential for data center connectivity and optical networks. Strategic partnerships with leading technology companies and a focus on innovation and product development further enhance MACOM's earning potential, enabling it to capitalize on the growing demand for high-speed and high-frequency solutions.
MACOM Technology Solutions Holdings Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q2-2025)
| % Change Since: 24.09%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a largely positive outlook with record revenues and strong performance in key segments such as Data Center and Telecom. However, there were some challenges noted, particularly in the industrial demand and ongoing adjustments with the Wolfspeed RF fab. Overall, the company demonstrated strong financial health and strategic product launches, indicating potential for sustained growth.Q2-2025 Updates
Positive Updates
Record Revenue in Q2 Fiscal 2025
The revenue for the second quarter of fiscal 2025 was $235.9 million, marking a new quarterly record and representing an 8.1% sequential increase.
Strong Performance in Data Center and Telecom Segments
Data Center revenue was $72.2 million, up 11% sequentially, and Telecom was $65.2 million, up 18% sequentially. Both segments showed notable growth and contributed significantly to overall performance.
Positive Book-to-Bill Ratio
The Q2 book-to-bill ratio was 1.1:1, indicating strong demand with customer orders exceeding revenue by approximately 10%.
Introduction of New Products
MACOM introduced the new Opto-Amp product line and demonstrated cutting-edge technology at major industry events, indicating strong innovation and market engagement.
Strong Cash and Financial Position
MACOM ended the quarter with approximately $682 million in cash and short-term investments, maintaining a strong balance sheet.
Negative Updates
Unremarkable Industrial Demand
Demand in traditional industrial and multi-markets, including automotive, factory automation, and medical, was described as unremarkable, indicating challenges in these areas.
Challenges with Wolfspeed RF Fab Transition
Although the transition is ahead of schedule, the Wolfspeed RF fab still presents gross margin challenges, and further improvements are needed.
Company Guidance
During MACOM's second fiscal quarter 2025 conference call, the company provided guidance for the third quarter of fiscal 2025. MACOM anticipates revenue to range between $246 million and $254 million, with an adjusted gross margin expected to be between 56.5% and 58.5%. The company also projects adjusted earnings per share to be in the range of $0.87 to $0.91, based on 76.5 million fully diluted shares. Sequential revenue growth is expected across all end markets, with Industrial & Defense projected to lead with approximately 10% growth, followed by Data Center at 5% growth, and telecom slightly up sequentially. Despite recognizing increased market uncertainty, MACOM remains optimistic due to its robust product portfolio and strategic growth initiatives.MACOM Technology Solutions Holdings Financial Statement Overview
Summary
MACOM Technology Solutions Holdings has exhibited solid revenue growth and maintains a strong balance sheet. However, recent profitability issues reflected in negative net income and EBITDA in the TTM period present challenges. Operational cash flows remain strong, supporting future growth potential. The company needs to address profitability concerns to stabilize financial health further.Income Statement
The company shows positive revenue growth over the years with a significant jump in TTM revenue compared to the previous year. However, the TTM net income turned negative, impacting the net profit margin adversely. Gross profit margin remains robust, but the decrease in EBIT and negative EBITDA in TTM highlight profitability challenges.62
Positive
Balance Sheet
The balance sheet remains strong with a healthy equity ratio and an improvement in stockholders' equity over the years. The company maintains a manageable debt-to-equity ratio. However, there is a noticeable increase in total debt in the TTM period.75
Positive
Cash Flow
The company demonstrates strong operating cash flow, with consistent free cash flow generation. Despite fluctuations in free cash flow growth rate, the operating cash flow to net income ratio remains robust. The free cash flow to net income ratio shows a positive trend, but the negative net income in TTM impacts this metric.68
Positive
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 845.21M | 729.58M | 648.41M | 675.17M | 606.92M | 530.04M |
| Gross Profit | 452.84M | 393.77M | 385.80M | 406.18M | 341.86M | 270.17M |
| EBITDA | -28.44M | 163.91M | 168.65M | 304.65M | 150.96M | 64.64M |
| Net Income | -86.51M | 76.86M | 91.58M | 439.95M | 37.97M | -46.08M |
Balance Sheet | ||||||
| Total Assets | 1.92B | 1.76B | 1.55B | 1.57B | 1.13B | 1.15B |
| Cash, Cash Equivalents and Short-Term Investments | 681.53M | 581.89M | 514.53M | 586.53M | 344.90M | 333.15M |
| Total Debt | 531.37M | 487.78M | 487.33M | 593.96M | 521.09M | 689.42M |
| Total Liabilities | 716.52M | 629.30M | 605.64M | 729.07M | 662.41M | 846.28M |
| Stockholders Equity | 1.20B | 1.13B | 947.60M | 842.75M | 471.74M | 300.15M |
Cash Flow | ||||||
| Free Cash Flow | 190.53M | 140.20M | 142.22M | 150.47M | 130.46M | 153.82M |
| Operating Cash Flow | 216.68M | 162.64M | 166.92M | 176.98M | 148.41M | 171.40M |
| Investing Cash Flow | -248.19M | -181.13M | 36.34M | -182.86M | -2.58M | -107.19M |
| Financing Cash Flow | 27.59M | -9.06M | -149.02M | -28.91M | -119.09M | -10.72M |
MACOM Technology Solutions Holdings Technical Analysis
Positive
140.68
Price Trends
124.19
Positive
115.80
Positive
120.91
Positive
Market Momentum
5.04
Positive
65.20
Neutral
58.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTSI, the sentiment is Positive. The current price of 140.68 is above the 20-day moving average (MA) of 134.81, above the 50-day MA of 124.19, and above the 200-day MA of 120.91, indicating a bullish trend. The MACD of 5.04 indicates Positive momentum. The RSI at 65.20 is Neutral, neither overbought nor oversold. The STOCH value of 58.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTSI.
MACOM Technology Solutions Holdings Risk Analysis
MACOM Technology Solutions Holdings disclosed 53 risk factors in its most recent earnings report. MACOM Technology Solutions Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MACOM Technology Solutions Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $8.38B | 43.26 | 23.87% | ― | 41.03% | 51.42% | |
77 Outperform | $5.09B | 23.57 | 11.83% | ― | 21.23% | 56.90% | |
75 Outperform | $11.82B | 30.76 | 6.70% | 3.55% | -12.90% | -51.90% | |
74 Outperform | $8.24B | 150.96 | 1.60% | ― | -1.34% | ― | |
73 Outperform | $7.15B | 140.00 | 7.39% | ― | -29.54% | -76.42% | |
70 Outperform | $10.47B | 138.48 | -7.70% | ― | 32.63% | -233.25% | |
63 Neutral | $34.07B | 6.13 | -11.73% | 1.80% | 5.33% | -18.31% |
* Technology Sector Average
Performance Comparison
MTSI
MACOM Technology Solutions Holdings
140.68
22.58
19.12%
LSCC
Lattice Semiconductor
52.01
-9.66
-15.66%
ONTO
Onto Innovation
104.04
-128.38
-55.24%
NVMI
Nova
284.96
45.07
18.79%
SWKS
Skyworks Solutions
78.76
-23.96
-23.33%
QRVO
Qorvo
88.78
-32.04
-26.52%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.