MACOM Technology Solutions Holdings (MTSI) AI Stock Analysis

• Market Cap: $9.82B
• Dividend Yield: N/A
• Average Volume (3M): 772.32K
• Price to Earnings (P/E): 138.5
• Beta (1Y): 1.56
• Revenue Growth: 33.50%
• EPS Growth: -197.38%
• Country: US
• Employees: 1,700
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): 0.90
• Shares Outstanding: 74,471,280
• 10 Day Avg. Volume: 780,215
• 30 Day Avg. Volume: 772,323
• 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: 1.07
• Enterprise Value/Revenue: 11.59
• Enterprise Value/Gross Profit: 22.00
• Enterprise Value/Ebitda: 742.84
• 1Y Price Target: $153.80
• Price Target Upside: 18.44% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 58 Neutral
• Price Target: $131.00 ▲(0.88% Upside)

The overall stock score of 58 reflects a mixed financial performance with positive revenue growth but weak profitability and cash flow metrics. Technical analysis indicates potential bearish momentum, and valuation is unattractive due to a negative P/E ratio. The earnings call provided a positive outlook with record revenues and strong segment performance, which supports the score.

Positive Factors

Financial Performance

MTSI reported record F3Q revenue at $252.1M, surpassing the $250M consensus, with broad-based growth across key end markets.

Market Position

MTSI remains one of the most compelling names in the communications and connectivity space, with differentiated technology, a diversified customer base, and exposure to multiple high-growth end markets.

Strategic Initiatives

Early control of the fab will accelerate efforts to improve yields, processes, capacity, and new product introductions, enhancing leverage and enabling faster delivery of high-performance, accretive products.

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 Sector

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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 129.86
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 129.86 is above the 20-day moving average (MA) of 126.27, below the 50-day MA of 133.63, and above the 200-day MA of 124.84, indicating a neutral trend. The MACD of -0.39 indicates Negative momentum. The RSI at 50.26 is Neutral, neither overbought nor oversold. The STOCH value of 69.12 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	81 Outperform	$7.39B	34.94	24.23%	―	43.69%	51.22%
RMBS	79 Outperform	$8.11B	35.68	20.30%	―	35.17%	0.10%
LSCC	75 Outperform	$9.03B	288.69	4.57%	―	-22.15%	-83.34%
SWKS	74 Outperform	$11.08B	29.74	6.61%	3.74%	-8.24%	-48.31%
QRVO	72 Outperform	$8.54B	108.42	2.33%	―	-8.84%	―
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%
MTSI	58 Neutral	$9.82B	138.48	-5.96%	―	33.50%	-197.38%