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MACOM Technology Solutions Holdings Inc (MTSI)
NASDAQ:MTSI
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MACOM Technology Solutions Holdings
(NASDAQ:MTSI)
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Rating:54Neutral
Price Target:
$132.00
▲(2.02% Upside)
The overall stock score for MACOM Technology Solutions Holdings is 54, driven primarily by mixed financial performance and technical indicators. While revenue growth is a positive aspect, the company's profitability and cash flow challenges are significant concerns. The technical analysis suggests a neutral to slightly bearish trend, and the valuation is unattractive due to a negative P/E ratio and lack of dividend yield.
Positive Factors
Revenue Growth
Consistent revenue growth indicates expanding market demand and effective business strategies, crucial for long-term success.
Market Position
Strong market position in high-performance semiconductors supports sustained demand across telecom, industrial, and defense sectors.
Balance Sheet Health
A moderate debt-to-equity ratio indicates financial stability, providing flexibility for growth and investment opportunities.
Negative Factors
Profitability Challenges
Negative profitability metrics suggest operational inefficiencies, which could hinder long-term financial performance and growth.
Cash Flow Concerns
Declining cash flow growth may limit the company's ability to invest in new opportunities and manage financial obligations effectively.
Return on Equity
Negative return on equity indicates inefficiencies in using shareholder funds, potentially impacting investor confidence and future capital raising.
MACOM Technology Solutions Holdings (MTSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.64B
Dividend YieldN/A
Average Volume (3M)997.43K
Price to Earnings (P/E)138.5
Beta (1Y)1.56
Revenue Growth33.50%
EPS Growth-197.38%
CountryUS
Employees1,700
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.90
Shares Outstanding74,471,280
10 Day Avg. Volume1,516,355
30 Day Avg. Volume997,433
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue11.59
Enterprise Value/Gross Profit22.00
Enterprise Value/Ebitda742.84
Forecast
1Y Price Target
$153.80Price Target Upside18.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
MACOM Technology Solutions Holdings Business Overview & Revenue Model
Company DescriptionMACOM Technology Solutions Holdings (MTSI) is a leading provider of high-performance analog semiconductor solutions for various markets including telecommunications, industrial, and defense. The company specializes in delivering a broad range of products such as optical devices, RF components, and microwave solutions that are essential for data center connectivity, 5G infrastructure, and radar systems. With a strong emphasis on innovation, MACOM integrates advanced technology to meet the evolving needs of its customers across diverse applications.
How the Company Makes MoneyMACOM generates revenue primarily through the sale of its semiconductor products, which include RF and microwave devices, optical components, and integrated circuits. The company's revenue model is driven by both direct sales to original equipment manufacturers (OEMs) and indirect sales through distribution channels. Key revenue streams include the telecommunications sector, where demand for 5G and broadband infrastructure is rising, as well as the industrial and defense sectors that require high-performance components. Significant partnerships with major technology firms and contractors in the defense industry also contribute to MACOM's earnings, along with ongoing investments in research and development to innovate and expand its product offerings.
MACOM Technology Solutions Holdings Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and successful new product introductions, particularly in the Data Center and Telecom segments. The Industrial & Defense segment also reached record revenues. However, challenges persist in the industrial market and in optimizing the Wolfspeed RF fab's gross margins. Overall, the positive achievements and growth prospects outweigh the challenges, indicating a strong performance.Q2-2025 Updates
Positive Updates
Record Revenue for Q2 FY2025
MACOM reported record revenue of $235.9 million for the second quarter of fiscal year 2025, an increase of 8.1% sequentially across all three end markets.
Strong Performance in Data Center and Telecom Segments
Data Center revenue was up 11% sequentially and Telecom was up 18%. The Data Center business is expected to grow by mid-40% year-over-year, driven by higher data rates and new technology deployments.
Record Quarterly Revenues in Industrial & Defense and Data Center
Industrial & Defense achieved record quarterly revenues of $98.5 million, with demand driven by DoD system upgrades in radar, EW, and communication systems.
Introduction of New Product Lines
MACOM introduced the Opto-Amp Product Line at SATELLITE 2025, capable of producing up to 40 watts of optical power, supporting free space optic applications.
Strong Financial Metrics
Adjusted EPS was $0.85 per diluted share. The book-to-bill ratio was 1.1:1, with a record backlog and strong cash position of approximately $682 million.
Negative Updates
Weak Industrial Market Performance
Demand in the traditional industrial and multi-markets area was unremarkable, indicating a weak performance in non-defense industrial segments.
Underutilization of Lowell Fab
Continued low demand in industrial markets is contributing to lower utilization of the Lowell fab, impacting gross margins.
Challenges in Improving Wolfspeed RF Fab Margins
The Wolfspeed RF business, though accretive to MACOM's P&L, remains dilutive to gross margins due to yield and throughput cycle time issues.
Company Guidance
In the recent MACOM conference call for the second fiscal quarter of 2025, the company provided revenue guidance for the third quarter, projecting revenues in the range of $246 million to $254 million. MACOM anticipates sequential revenue growth across all three end markets: Industrial & Defense is expected to grow by approximately 10%, Data Center by 5%, and telecom to experience slight growth. The company is also forecasting an adjusted gross margin between 56.5% and 58.5%, with adjusted earnings per share anticipated to be between $0.87 and $0.91, based on a fully diluted share count of 76.5 million. MACOM's strategic focus on high-performance solutions, coupled with a diverse portfolio, positions it for continued market share gains despite macroeconomic uncertainties.MACOM Technology Solutions Holdings Financial Statement Overview
Summary
MACOM Technology Solutions Holdings shows mixed financial performance. Revenue growth is positive at 7.29%, but profitability metrics are weak with negative net profit and EBIT margins. The balance sheet is stable with a reasonable debt-to-equity ratio of 0.45, but the negative return on equity is concerning. Cash flow challenges are evident with a negative free cash flow growth rate of -9.83%.Income Statement
MACOM Technology Solutions Holdings shows a mixed performance in its income statement. The TTM data indicates a revenue growth rate of 7.29%, which is a positive sign of growth. However, the company is currently experiencing negative net profit and EBIT margins, indicating profitability challenges. Historically, the company had stronger margins, but recent results show a decline, particularly in EBITDA margin, which has turned negative.55
Neutral
Balance Sheet
The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.45 in the TTM, which is a reasonable level of leverage for the industry. However, the return on equity has turned negative, suggesting inefficiencies in generating returns from equity. The equity ratio is not explicitly calculated but appears stable given the total assets and equity figures.65
Positive
Cash Flow
Cash flow analysis reveals some concerns with a negative free cash flow growth rate of -9.83% in the TTM, indicating potential cash flow challenges. The operating cash flow to net income ratio is strong at 0.77, suggesting good cash generation relative to net income, although the free cash flow to net income ratio has declined compared to previous periods.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 906.80M | 729.58M | 648.41M | 675.17M | 606.92M | 530.04M |
| Gross Profit | 477.46M | 371.40M | 362.06M | 380.59M | 310.94M | 237.30M |
| EBITDA | 14.14M | 163.91M | 179.69M | 304.65M | 133.49M | 64.64M |
| Net Income | -69.92M | 76.86M | 91.58M | 439.95M | 37.97M | -46.08M |
Balance Sheet | ||||||
| Total Assets | 2.00B | 1.76B | 1.55B | 1.57B | 1.13B | 1.15B |
| Cash, Cash Equivalents and Short-Term Investments | 735.23M | 581.89M | 514.53M | 586.53M | 344.90M | 333.15M |
| Total Debt | 568.71M | 487.78M | 519.39M | 634.09M | 565.88M | 728.86M |
| Total Liabilities | 739.92M | 629.30M | 605.64M | 729.07M | 662.41M | 846.28M |
| Stockholders Equity | 1.26B | 1.13B | 947.60M | 842.75M | 471.74M | 300.15M |
Cash Flow | ||||||
| Free Cash Flow | 171.79M | 140.20M | 142.22M | 150.47M | 130.46M | 153.82M |
| Operating Cash Flow | 228.06M | 162.64M | 166.92M | 176.98M | 148.41M | 171.40M |
| Investing Cash Flow | -278.65M | -181.13M | 36.34M | -182.86M | -2.58M | -107.19M |
| Financing Cash Flow | 58.17M | -9.06M | -149.02M | -28.91M | -119.09M | -10.72M |
MACOM Technology Solutions Holdings Technical Analysis
Positive
129.39
Price Trends
130.77
Negative
130.34
Negative
124.57
Positive
Market Momentum
-0.66
Positive
50.13
Neutral
27.48
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 129.39 is below the 20-day moving average (MA) of 129.77, below the 50-day MA of 130.77, and above the 200-day MA of 124.57, indicating a neutral trend. The MACD of -0.66 indicates Positive momentum. The RSI at 50.13 is Neutral, neither overbought nor oversold. The STOCH value of 27.48 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 52 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $9.12B | 42.33 | 19.81% | ― | 43.69% | 51.22% | |
76 Outperform | $11.04B | 48.56 | 18.66% | ― | 35.17% | 0.10% | |
75 Outperform | $9.77B | 311.57 | 4.61% | ― | -22.15% | -83.34% | |
74 Outperform | $11.80B | 31.68 | 9.41% | 3.53% | -8.24% | -48.31% | |
67 Neutral | $8.62B | 108.57 | 2.35% | ― | -8.84% | ― | |
54 Neutral | $9.64B | 138.48 | -5.96% | ― | 33.50% | -197.38% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
MTSI
MACOM Technology Solutions Holdings
129.39
18.13
16.30%
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18.28
34.45%
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Nova
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RMBS
Rambus
102.62
60.40
143.06%
SWKS
Skyworks Solutions
79.51
-15.59
-16.39%
QRVO
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93.02
-10.28
-9.95%
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.