MACOM Technology Solutions Holdings (MTSI) AI Stock Analysis

• Market Cap: $9.34B
• Dividend Yield: N/A
• Average Volume (3M): 671.46K
• Price to Earnings (P/E): 138.5
• Beta (1Y): 1.57
• Revenue Growth: 33.50%
• EPS Growth: -197.38%
• Country: US
• Employees: 1,700
• Sector: Technology
• Sector Strength: 89
• Industry: Semiconductors
• EPS (TTM): 0.90
• Shares Outstanding: 74,471,280
• 10 Day Avg. Volume: 1,068,943
• 30 Day Avg. Volume: 671,464
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 11.59
• Enterprise Value/Gross Profit: 21.16
• Enterprise Value/Ebitda: -1.65K
• 1Y Price Target: $150.64
• Price Target Upside: 22.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 58 Neutral
• Price Target: $131.00 ▲(6.43% Upside)

MACOM Technology Solutions Holdings has a mixed overall stock score of 58. The company's financial performance shows positive revenue growth but is hampered by weak profitability and cash flow issues. The earnings call provides a positive outlook with record revenues and strong segment performance, which boosts the score. However, the negative P/E ratio and lack of technical indicators limit the stock's attractiveness.

Positive Factors

Data Center Growth

The company's Data Center is expected to grow significantly, with a 48% year-over-year increase.

Revenue and Earnings

F3Q revenue was a record at $252.1M ahead of the $250M consensus with earnings of $0.90 matching expectations.

Revenue Guidance

Q4 revenue guidance of $260M at the midpoint was ahead of the $253.5M expectation with EPS of $0.93 about a penny ahead of consensus, despite the $0.02 negative impact from the fab transition.

Negative Factors

Gross Margin

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.

Margin Impact

The market's reaction to the modest and temporary margin impact from the accelerated RTP fab transition appears significantly overdone.

Telecom Segment

Telecom is expected to decline quarter-over-quarter in F4Q25.

MACOM Technology Solutions Holdings Business Overview & Revenue Model

Company Description

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications across the radio frequency (RF), microwave, millimeter wave, and lightwave spectrum in the United States, China, the Asia Pacific, and internationally. The company offers a portfolio of standard and custom devices, including integrated circuits, multi-chip modules, diodes, amplifiers, switches and switch limiters, passive and active components, and subsystems. Its semiconductor products are electronic components that are incorporated in electronic systems, such as wireless basestations, high-capacity optical networks, radar, and medical systems and test and measurement. The company serves various markets comprising telecommunication that includes carrier infrastructure, which comprise long-haul/metro, 5G, and fiber-to-the-X/passive optical network; industrial and defense, including military and commercial radar, RF jammers, electronic countermeasures, and communication data links, as well as multi-market applications, such as industrial, medical, test and measurement, and scientific applications; and data centers. It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors. The company was founded in 1950 and is headquartered in Lowell, Massachusetts.

How the Company Makes Money

MACOM 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 Financial Statement Overview

Summary

MACOM Technology Solutions Holdings shows strong revenue growth and a solid balance sheet. However, recent profitability issues with negative net income and EBITDA in the TTM period present challenges. Strong operational cash flows support future growth potential, but profitability concerns need addressing.

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	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	496.54M	393.77M	385.80M	406.18M	341.86M	270.17M
EBITDA	-6.38M	163.91M	168.65M	304.65M	150.96M	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	487.33M	593.96M	521.09M	689.42M
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

• Technical Analysis Sentiment: Negative
• Last Price: 123.09
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTSI, the sentiment is Negative. The current price of 123.09 is below the 20-day moving average (MA) of 133.29, below the 50-day MA of 134.92, and below the 200-day MA of 124.56, indicating a bearish trend. The MACD of -3.41 indicates Positive momentum. The RSI at 37.11 is Neutral, neither overbought nor oversold. The STOCH value of 28.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	83 Outperform	$7.49B	34.76	24.23%	―	43.69%	51.22%
ONTO	77 Outperform	$5.39B	26.47	10.53%	―	15.51%	20.31%
LSCC	72 Outperform	$8.70B	277.42	4.57%	―	-22.15%	-83.34%
SWKS	71 Outperform	$11.19B	30.03	6.61%	3.76%	-8.24%	-48.31%
QRVO	69 Neutral	$8.40B	104.28	2.33%	―	-8.84%	―
Sector *	61 Neutral	$36.30B	7.30	-7.27%	1.97%	7.76%	-6.42%
MTSI	58 Neutral	$9.34B	138.48	-5.96%	―	33.50%	-197.38%