MACOM Technology Solutions Holdings (MTSI) AI Stock Analysis

• Market Cap: $9.77B
• Dividend Yield: N/A
• Average Volume (3M): 756.29K
• Price to Earnings (P/E): 138.5
• Beta (1Y): 1.67
• Revenue Growth: 32.63%
• EPS Growth: -233.25%
• Country: US
• Employees: 1,700
• Sector: Technology
• Sector Strength: 79
• Industry: Semiconductors
• EPS (TTM): 0.85
• Shares Outstanding: 74,390,670
• 10 Day Avg. Volume: 601,853
• 30 Day Avg. Volume: 756,293
• PEG Ratio: <0.01
• Price to Book (P/B): 4.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.02
• Enterprise Value/Market Cap: 0.42
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 9.03
• Enterprise Value/Ebitda: 17.91
• 1Y Price Target: $144.60
• Price Target Upside: 12.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 69 Neutral
• Price Target: $135.00 ▲(4.68%Upside)

MACOM Technology Solutions Holdings demonstrates strong revenue growth and a stable financial position, which are significant strengths. However, challenges with profitability, as indicated by negative net income and EBITDA, and valuation concerns due to a negative P/E ratio, weigh on the overall score. Technical indicators show positive momentum, but potential overbought conditions warrant caution. The earnings call provided a positive outlook with promising segment performances and guidance, yet highlighted some operational challenges.

Positive Factors

Data Center Growth

Data Center remains robust, driven by 800G and 1.6T solutions, with growth potentially outpacing the previous year's performance.

Earnings

Macom's better-than-expected results and solid upside to June quarter guidance reflect sustained improvement in the underlying demand dynamics of the business with book-to-bill increasing to 1.1 with continued momentum in order activity, and another quarter of record backlog.

SATCOM Opportunities

SATCOM is gaining momentum with a healthy pipeline of activity and new products driving meaningful content expansion opportunities.

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 and Telecom Demand Concerns

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 Business Overview & Revenue Model

Company Description

MACOM 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 Money

MACOM 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 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.

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.

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.

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
	EBIT
99.65M	73.67M	107.40M	247.42M	81.00M	-95.00K
	EBITDA
-28.44M	163.91M	168.65M	304.65M	150.96M	64.64M
	Net Income Common Stockholders
-86.51M	76.86M	91.58M	439.95M	37.97M	-46.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
681.53M	581.89M	514.53M	586.53M	344.90M	333.15M
	Total Assets
1.92B	1.76B	1.55B	1.57B	1.13B	1.15B
	Total Debt
531.37M	487.78M	487.33M	593.96M	521.09M	689.42M
	Net Debt
420.45M	340.98M	313.38M	474.01M	364.56M	559.98M
	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

• Technical Analysis Sentiment: Positive
• Last Price: 128.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

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 128.97 is above the 20-day moving average (MA) of 125.17, above the 50-day MA of 113.21, and above the 200-day MA of 118.53, indicating a bullish trend. The MACD of 4.14 indicates Positive momentum. The RSI at 62.24 is Neutral, neither overbought nor oversold. The STOCH value of 84.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTSI.

MACOM Technology Solutions Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	80 Outperform	$6.85B	34.70	23.87%	―	41.03%	51.42%
ONTO	74 Outperform	$4.89B	21.45	11.83%	―	21.23%	56.90%
SWKS	74 Outperform	$10.81B	27.83	6.70%	3.89%	-12.90%	-51.90%
QRVO	72 Outperform	$7.69B	139.02	1.60%	―	-1.34%	―
LSCC	71 Outperform	$7.01B	133.32	7.39%	―	-29.54%	-76.42%
MTSI	69 Neutral	$9.77B	138.48	-7.70%	―	32.63%	-233.25%
Sector *	62 Neutral	$11.97B	10.08	-7.46%	2.96%	7.37%	-8.22%