M/A-COM Technology Solutions
MTSI
$263.08
-1.46%
MACOM Technology Solutions Holdings, Inc. is a leading provider of analog, digital, and mixed-signal semiconductor solutions for industrial, medical, scientific, and test and measurement markets. The company differentiates itself through a broad portfolio of high-performance RF, microwave, and photonic components, serving OEMs and distributors globally. Investor attention is currently focused on MACOM's strong revenue growth trajectory, driven by expanding demand in data center and aerospace/defense end markets, while debates center on margin sustainability and the impact of recent inventory adjustments on near-term earnings.…
MTSI
M/A-COM Technology Solutions
$263.08
Investment Opinion: Should I buy MTSI Today?
Rating: Hold. MACOM is a high-growth semiconductor company with strong momentum, but its elevated valuation and recent volatility warrant caution. The analyst consensus is Buy with a $400.92 average target, implying 50.2% upside, but the stock must execute flawlessly to justify the premium.
Supporting Evidence: Revenue growth of 22.5% YoY is well above the industry average of ~12%. Gross margin expanded 340 bps to 56.9%, and operating margin improved 280 bps to 17.6%. Forward P/E of 38.5x is high but supported by a PEG ratio of 1.04, suggesting fair value relative to growth. Free cash flow of $152.49M provides a cushion. The analyst target implies significant upside, but the stock has already pulled back 36% from its high, offering a better entry point.
Risks & Conditions: The biggest risks are valuation compression (P/E contracting to industry average) and growth deceleration. This Hold would upgrade to Buy if the stock pulls back to $230 (forward P/E ~22x) or if revenue growth accelerates above 25%. It would downgrade to Sell if growth falls below 10% or if gross margins contract below 50%. Overall, the stock is fairly valued relative to its growth rate (PEG ~1.0) but overvalued on an absolute P/E basis compared to peers.
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MTSI 12-Month Price Forecast
MACOM's strong growth and margin expansion are offset by a premium valuation and high volatility. The base case of 15-20% growth seems achievable, but the stock's recent 28% decline suggests near-term uncertainty. The neutral stance reflects balanced risk/reward: the stock could rally to $400 if growth accelerates, but could fall to $300 if growth disappoints. Key catalysts to watch are the next earnings report and gross margin trends. Upgrade to bullish if revenue growth exceeds 25% and margins expand; downgrade to bearish if growth falls below 10%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on M/A-COM Technology Solutions's 12-month outlook, with a consensus price target around $400.92 and implied upside of +52.4% versus the current price.
Average Target
$400.92
0 analysts
Implied Upside
+52.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$300 - $450
Analyst target range
The stock is covered by 13 analysts, with a consensus recommendation of 'Buy' (mean rating 1.64 on a 1-5 scale). The average target price is $400.92, implying a +50.2% upside from the current price of $266.99. The distribution leans bullish, with 7 Buy ratings, 2 Overweight, 2 Neutral, and no Sell ratings. The target range spans from a low of $300.00 to a high of $450.00. The high target of $450 assumes continued strong growth and multiple expansion, likely driven by data center and AI-related demand. The low target of $300 suggests a more conservative view, factoring in potential margin compression or cyclical headwinds. Recent ratings from Stifel, Barclays, Needham, and others have been reaffirmed as Buy/Overweight, indicating sustained institutional confidence. The wide spread between low and high targets ($150) reflects high uncertainty about the pace of growth and market conditions.
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Bulls vs Bears: MTSI Investment Factors
MACOM presents a compelling growth story with 22.5% revenue growth, expanding margins, and a healthy balance sheet, supported by secular tailwinds in data center and defense. However, the stock's forward P/E of 38.5x trades at a 75% premium to the industry, and recent 28% monthly decline highlights elevated volatility. The bull case rests on sustained growth acceleration and margin expansion justifying the premium, while the bear case centers on valuation compression if growth disappoints. The single most important tension is whether the company can maintain its 20%+ revenue growth trajectory; if it does, the stock likely re-rates higher, but any deceleration could trigger a sharp correction toward the 52-week low of $118.16.
Bullish
- Strong Revenue Growth: Revenue grew 22.5% YoY to $288.96M in Q2 2026, accelerating from 15.9% in the prior year. This outpaces the semiconductor industry average growth of ~12%, driven by data center and aerospace/defense demand.
- Expanding Profit Margins: Gross margin improved to 56.9% from 53.5% a year ago, and operating margin expanded to 17.6% from 14.8%. This demonstrates operating leverage and favorable product mix.
- Healthy Balance Sheet: Debt-to-equity is low at 0.41 and current ratio is 3.71, indicating strong liquidity. Free cash flow of $152.49M TTM provides internal funding for growth without dilutive equity.
- Analyst Consensus Buy: 13 analysts rate the stock a Buy with a mean target of $400.92, implying 50.2% upside. No Sell ratings, and recent reaffirmations from Stifel, Barclays, and Needham signal institutional confidence.
Bearish
- Elevated Valuation Premium: Forward P/E of 38.5x is 75% above the semiconductor industry average of 22x. This premium leaves little room for error; any growth deceleration could trigger multiple compression.
- Recent Price Volatility: The stock has fallen 28.4% in the past month and is down 36.2% from its 52-week high of $418.90. Beta of 1.655 implies 65.5% more volatility than the market, amplifying downside risk.
- Negative Trailing EPS: Trailing P/E is -174.5 due to a one-time loss in Q1 2025. While forward earnings are expected to normalize, the negative GAAP earnings create uncertainty and may deter value-oriented investors.
- High EV/EBITDA Multiple: EV/EBITDA of 247.6x is extremely high, suggesting the market is pricing in aggressive future growth. Any EBITDA miss could lead to severe de-rating.
MTSI Technical Analysis
The stock is in a clear long-term uptrend, with a 1-year price change of +94.47%, significantly outperforming the S&P 500's +16.47%. Currently trading at $266.99, it sits at 49.4% of its 52-week range ($118.16 to $418.90), suggesting a pullback from the highs but still well above the lows. This positioning indicates the stock is in a corrective phase after a strong rally, potentially offering a re-entry point for trend-following investors. Short-term momentum has turned sharply negative, with a 1-month price change of -28.44% and a 3-month change of -7.18%, diverging from the strong 1-year trend. The 1-month relative strength vs. SPY is -29.22%, confirming significant underperformance. This divergence could signal a temporary pullback within a secular uptrend or the start of a deeper correction, depending on whether the stock can hold key support levels. The 52-week high of $418.90 acts as major resistance, while the 52-week low of $118.16 is the ultimate support. A break above $418.90 would signal a resumption of the uptrend, while a breakdown below $266.99 (current price) could test the $275 area (recent swing low). With a beta of 1.655, the stock is 65.5% more volatile than the market, implying larger swings and higher risk for position sizing.
Beta
1.66
1.66x market volatility
Max Drawdown
-35.8%
Largest decline past year
52-Week Range
$118-$419
Price range past year
Annual Return
+91.1%
Cumulative gain past year
| Period | MTSI Return | S&P 500 |
|---|---|---|
| 1m | -28.7% | +1.4% |
| 3m | -1.0% | +3.9% |
| 6m | +16.3% | +6.3% |
| 1y | +91.1% | +16.0% |
| ytd | +50.4% | +8.4% |
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MTSI Fundamental Analysis
Revenue is growing strongly, with the most recent quarter (Q2 2026) reporting $288.96 million, up 22.5% year-over-year. This marks an acceleration from the prior quarter's $271.61 million and from $235.89 million in the year-ago period. The multi-quarter trend shows consistent sequential growth, driven by robust demand across industrial and data center end markets. The company is profitable, with net income of $46.33 million in Q2 2026, up from $31.67 million in the same quarter last year. Gross margin improved to 56.9% from 53.5% a year ago, reflecting better product mix and operating leverage. Operating margin expanded to 17.6% from 14.8%, indicating improving cost controls. The balance sheet is healthy, with a debt-to-equity ratio of 0.41 and a current ratio of 3.71, suggesting ample liquidity. Free cash flow for the trailing twelve months is $152.49 million, providing internal funding for growth. Return on equity is negative at -4.08% due to a one-time loss in Q1 2025, but the recent quarters show positive ROE, indicating a return to profitability.
Quarterly Revenue
$288955000.0B
2026-04
Revenue YoY Growth
+22.5%
YoY Comparison
Gross Margin
56.9%
Latest Quarter
Free Cash Flow
$152490000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MTSI Overvalued?
Since net income is positive (TTM net income of $46.33 million), the primary valuation metric is the P/E ratio. The trailing P/E is negative (-174.53) due to the one-time loss in Q1 2025, but the forward P/E of 38.51 is more relevant. The gap between trailing and forward P/E implies the market expects earnings to normalize and grow significantly. Compared to the semiconductor industry average P/E of approximately 22x, MACOM's forward P/E of 38.5x represents a 75% premium. This premium may be justified by the company's superior revenue growth (22.5% YoY) and expanding margins, but it also leaves little room for error. Historically, the stock's P/E has ranged from 3.8x (Q4 2022) to 129x (Q1 2024). The current forward P/E of 38.5x is near the middle of this range, suggesting it is not excessively overvalued relative to its own history. However, the high premium to the industry warrants caution.
PE
-174.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~129x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
247.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: MACOM's trailing P/E of -174.5x reflects a one-time loss in Q1 2025, but the forward P/E of 38.5x is still elevated. The EV/EBITDA of 247.6x is extremely high, meaning the stock is priced for perfection. Any EBITDA shortfall could lead to severe multiple compression. The company's net margin of -5.6% TTM is negative due to the one-time loss, though recent quarters show positive net income. Debt-to-equity is low at 0.41, but the high valuation leaves little margin of safety. Free cash flow of $152.49M is positive, but the PCF ratio of 40.1x suggests the market is paying a premium for that cash flow.
Market & Competitive Risks: The stock's beta of 1.655 makes it highly sensitive to macro shocks, and the recent 28.4% monthly decline shows how quickly sentiment can shift. The semiconductor industry is cyclical, and MACOM's premium valuation (75% above industry P/E) makes it vulnerable to sector rotation. Competitors like Qorvo and Skyworks could pressure margins. The stock's 52-week range of $118.16 to $418.90 indicates extreme volatility; a return to the low would represent a 55.7% decline from current levels.
Worst-Case Scenario: If revenue growth decelerates below 10% due to inventory corrections or macro headwinds, the forward P/E could contract to the industry average of 22x, implying a price of ~$231 (based on estimated EPS of $10.52). This would be a 13.5% decline from $266.99. In a severe recession, the stock could test its 52-week low of $118.16, representing a 55.7% loss. The max drawdown of -34.83% (from the 52-week high) already occurred, but further downside is possible if earnings disappoint.
FAQ
The key risks are: 1) Valuation risk: forward P/E of 38.5x is high and could contract if growth slows. 2) Volatility risk: beta of 1.655 means the stock is 65.5% more volatile than the market, with a recent 28% monthly decline. 3) Execution risk: the company must sustain 20%+ revenue growth to justify the premium; any deceleration could lead to a sharp selloff. 4) Cyclical risk: the semiconductor industry is cyclical, and a downturn could pressure earnings. The most severe risk is a recession causing the stock to test its 52-week low of $118.16, a 55.7% decline from current levels.
The 12-month forecast is mixed: the bull case (30% probability) sees the stock reaching $400-$450 on sustained 25%+ growth and margin expansion. The base case (45% probability) targets $300-$400 with 15-20% growth. The bear case (25% probability) sees the stock falling to $118-$300 if growth decelerates below 10%. The most likely scenario is the base case, where the stock trades near the analyst average target of $400.92, implying 50% upside. However, the recent 28% decline suggests near-term uncertainty, and the stock could remain volatile.
MTSI's forward P/E of 38.5x is 75% above the semiconductor industry average of 22x, suggesting it is overvalued on a relative basis. However, its PEG ratio of 1.04 indicates it is fairly valued relative to its earnings growth rate. Historically, the stock's P/E has ranged from 3.8x to 129x, so the current level is near the middle. The market is pricing in continued strong growth and margin expansion. Given the premium to peers, the stock is overvalued on a static basis but may be justified by its superior growth trajectory.
MTSI is a high-growth semiconductor stock with 22.5% YoY revenue growth and expanding margins, but it trades at a forward P/E of 38.5x, a 75% premium to the industry average of 22x. The analyst consensus is Buy with a $400.92 average target, implying 50.2% upside. However, the stock has high volatility (beta 1.655) and recently fell 28% in a month. It could be a good buy for growth investors with a long-term horizon who can tolerate drawdowns, but value investors may find it overvalued. The biggest risk is valuation compression if growth slows.
MTSI is better suited for long-term investment given its growth profile and volatility. The stock has a beta of 1.655, making it risky for short-term trading due to sharp swings (e.g., 28% monthly decline). Long-term investors can benefit from secular growth in data center and defense, with potential for 50% upside to analyst targets. The company does not pay a dividend, so total return depends on price appreciation. A minimum holding period of 3-5 years is recommended to ride out cyclicality. Short-term traders may find opportunities around earnings, but should be cautious of high volatility.
