MACOM Technology Solutions Holdings (MTSI) AI Stock Analysis

• Market Cap: $10.21B
• Dividend Yield: N/A
• Average Volume (3M): 598.61K
• Price to Earnings (P/E): 138.5
• Beta (1Y): 1.59
• Revenue Growth: 32.63%
• EPS Growth: -233.25%
• Country: US
• Employees: 1,700
• Sector: Technology
• Sector Strength: 90
• Industry: Semiconductors
• EPS (TTM): 0.85
• Shares Outstanding: 74,390,670
• 10 Day Avg. Volume: 436,261
• 30 Day Avg. Volume: 598,612
• PEG Ratio: -13.25
• Price to Book (P/B): 8.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 53.60
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 3.49
• Enterprise Value/Gross Profit: 23.48
• Enterprise Value/Ebitda: 46.59
• 1Y Price Target: $152.00
• Price Target Upside: 10.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 70 Outperform
• Price Target: $151.00 ▲(9.68%Upside)

MACOM Technology Solutions Holdings shows solid financial performance and strong technical momentum, but the negative P/E ratio and overbought technical indicators suggest caution. The positive outlook from the earnings call, with record revenues and strategic growth initiatives, improves the score, but profitability issues need addressing to enhance financial stability.

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.

Earnings Performance

Macom's better than expected results and solid upside to June quarter guidance reflect sustained improvement in the underlying demand dynamics of the business.

Negative Factors

Gross Margin Pressure

Gross margin was once again the only potential negative largely driven by under absorption in the Lowell fab.

Industrial and Telecom Demand

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., 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 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	Sep 2024	Sep 2023	Sep 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	729.58M	648.41M	675.17M	606.92M	530.04M
Gross Profit	393.77M	385.80M	406.18M	341.86M	270.17M
EBITDA	163.91M	168.65M	304.65M	150.96M	64.64M
Net Income	76.86M	91.58M	439.95M	37.97M	-46.08M
Balance Sheet
Total Assets	1.76B	1.55B	1.57B	1.13B	1.15B
Cash, Cash Equivalents and Short-Term Investments	581.89M	514.53M	586.53M	344.90M	333.15M
Total Debt	487.78M	487.33M	593.96M	521.09M	689.42M
Total Liabilities	629.30M	605.64M	729.07M	662.41M	846.28M
Stockholders Equity	1.13B	947.60M	842.75M	471.74M	300.15M
Cash Flow
Free Cash Flow	140.20M	142.22M	150.47M	130.46M	153.82M
Operating Cash Flow	162.64M	166.92M	176.98M	148.41M	171.40M
Investing Cash Flow	-181.13M	36.34M	-182.86M	-2.58M	-107.19M
Financing Cash Flow	-9.06M	-149.02M	-28.91M	-119.09M	-10.72M

MACOM Technology Solutions Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 137.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 137.67 is below the 20-day moving average (MA) of 138.85, above the 50-day MA of 132.39, and above the 200-day MA of 123.28, indicating a neutral trend. The MACD of 1.57 indicates Positive momentum. The RSI at 52.97 is Neutral, neither overbought nor oversold. The STOCH value of 36.77 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	82 Outperform	$7.69B	39.26	23.87%	―	41.03%	51.42%
ONTO	77 Outperform	$4.81B	22.26	11.83%	―	21.23%	56.90%
QRVO	74 Outperform	$7.92B	145.01	1.60%	―	-1.34%	―
LSCC	73 Outperform	$7.18B	144.79	7.39%	―	-29.54%	-76.42%
MTSI	70 Outperform	$10.21B	138.48	-7.70%	―	32.63%	-233.25%
SWKS	70 Outperform	$10.86B	28.55	6.70%	3.91%	-12.90%	-51.90%
Sector *	63 Neutral	£505.90M	23.92	-8.45%	170.41%	4.53%	-18.72%