M/A-COM Technology Solutions
MTSI
$258.11
+4.20%
MACOM Technology Solutions Holdings, Inc. is a provider of analog, digital, and mixed-signal semiconductor solutions, serving original equipment manufacturers and distributors across industrial, medical, scientific, and test and measurement markets. The company operates as a specialized player in the semiconductor industry, focusing on high-performance RF, microwave, and millimeterwave applications. The current investor narrative centers on a powerful recovery and growth story, as the company has rebounded from a significant loss in early 2025 to post strong consecutive profitable quarters, with recent quarterly revenue surging 24.5% year-over-year, driving significant stock price appreciation and positioning it as a beneficiary of demand in industrial and communications infrastructure.…
MTSI
M/A-COM Technology Solutions
$258.11
Investment Opinion: Should I buy MTSI Today?
Rating & Thesis: Hold. MTSI presents a classic 'great company, expensive stock' dilemma where the powerful fundamental recovery is fully priced in, leaving limited near-term upside and elevated downside risk. The overwhelmingly bullish analyst consensus (9 Buys, 1 Neutral) and implied growth are already reflected in the current price of $238.30.
Supporting Evidence: The recommendation is supported by four key data points: 1) The forward P/E of 42.8x is rich for the sector, 2) Revenue growth, while strong at 24.5% YoY, must be sustained to justify this multiple, 3) The stock trades at 92% of its 52-week high after a 129.6% rally, indicating exhausted momentum, and 4) The high beta of 1.48 signals above-average volatility risk for new buyers at these levels. The valuation premium (P/S 9.75x vs. likely lower sector median) suggests the market expects perfection.
Risks & Conditions: The two biggest risks are a growth deceleration triggering multiple compression and a broad market pullback exacerbating the stock's high volatility. This Hold rating would upgrade to Buy on a significant pullback (e.g., to the $180-$200 range) that improves the risk/reward profile, or if forward growth estimates are revised materially higher. It would downgrade to Sell if quarterly revenue growth decelerates below 15% or gross margins contract. The stock is currently overvalued relative to its own history and sector peers, pricing in optimistic future success.
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MTSI 12-Month Price Forecast
The outlook is balanced with a tilt towards caution. The base case (55% probability) of range-bound consolidation is most likely, as the stock digests its enormous gains. The fundamental story is compelling, but the risk/reward at current levels is unattractive for new money. The stance is neutral because the upside to the bull case target is limited (~15-25%) relative to the downside risk in the bear case (~15-33%). An upgrade to bullish would require a meaningful pullback to improve the entry point or several quarters of sustained outperformance that begins to justify the premium. A downgrade to bearish would be triggered by a clear breakdown in the growth trajectory.
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 $335.54 and implied upside of +30.0% versus the current price.
Average Target
$335.54
2 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
2
covering this stock
Price Range
$206 - $336
Analyst target range
Analyst coverage for MTSI appears limited, with only two analysts providing estimates for future EPS and revenue, indicating this may be a smaller or less-followed name within the semiconductor sector. The consensus sentiment, however, as gleaned from recent institutional ratings, is overwhelmingly bullish; of the ten most recent actions listed, nine are Buys (or Overweight/Neutral equivalents) with only one Neutral rating, and no Sell ratings. The average revenue estimate for the period is $1.52 billion, with a high estimate of $1.56 billion and a low of $1.48 billion. The wide target price range implied by the earnings estimates (low of $6.49, high of $6.81) relative to the average of $6.65 signals a moderate degree of uncertainty or variance in analyst models. The pattern of recent ratings shows no downgrades, with all actions being reiterations of Buy or Neutral ratings, suggesting sustained institutional confidence following the company's strong financial results reported in early 2026.
Bulls vs Bears: MTSI Investment Factors
The evidence is strongly bifurcated: compelling fundamental improvement clashes with extreme valuation and technical overextension. The bull case is anchored in a demonstrable, powerful turnaround with 24.5% revenue growth, margin expansion to 55.9%, and a flood of positive cash flow. The bear case warns that this stellar performance is already fully priced in, with forward P/E at 42.8x and the stock trading near its 52-week high after a 129.6% rally. Currently, the bear side has stronger near-term evidence due to the sheer magnitude of the valuation premium and price appreciation, which discounts years of perfect execution. The single most important tension is whether MTSI can sustain its >20% growth rate long enough to grow into its lofty valuation, or if the inevitable cyclical or competitive slowdown will trigger a painful derating.
Bullish
- Explosive Revenue Growth & Profitability: Q1 2026 revenue surged 24.5% YoY to $271.6M, continuing a sequential growth trend from $235.9M in Q2 2025. The company executed a dramatic turnaround from a net loss of -$167.5M in Q1 2025 to a net income of $48.8M in Q1 2026, demonstrating a powerful recovery story.
- Strong Margin Expansion & Cash Flow: Gross margin expanded 460 bps YoY to 55.9% in Q1 2026, indicating improved pricing power and efficiency. The company generated $30.0M in quarterly free cash flow and $132.7M TTM, providing ample internal funding for growth.
- Overwhelmingly Bullish Analyst Sentiment: Recent institutional ratings show 9 out of 10 actions are Buy or equivalent, with no Sell ratings. This sustained confidence follows the strong financial results and supports the positive narrative.
- Powerful Technical Momentum: The stock is up 129.6% over the past year and 36.2% over three months, trading at 92% of its 52-week range. This price action reflects strong market conviction in the recovery and growth story.
Bearish
- Extremely High Valuation Premium: The forward P/E of 42.8x, P/S of 9.75x, and EV/Sales of 17.32x are significantly elevated for the semiconductor sector. This pricing leaves no room for execution missteps and increases downside risk if growth decelerates.
- Significant Price & Valuation Stretch: Trading at 92% of its 52-week high after a 129.6% rally suggests the stock is overextended. The P/S ratio has ballooned from 28.3x to 48.2x over recent quarters, indicating the valuation has run far ahead of fundamentals.
- High Volatility & Recent Pullback: A beta of 1.48 means the stock is 48% more volatile than the market, which is confirmed by a recent max drawdown of -24.2% from the March high. This volatility makes it a higher-risk holding, especially after a major rally.
- Limited Analyst Coverage & Model Variance: Only two analysts provide estimates, indicating lower institutional visibility. The wide EPS target range ($6.49-$6.81) around the $6.65 average suggests underlying uncertainty in forward projections.
MTSI Technical Analysis
The stock is in a powerful, sustained uptrend, evidenced by a staggering 129.62% gain over the past year. As of the latest close of $238.30, the price is trading near the top of its 52-week range, approximately 92% of the way from its 52-week low of $84.0 to its high of $258.98, indicating strong momentum but also raising questions about potential overextension. The recent momentum shows signs of volatility within the uptrend; the stock is down 1.12% over the past month but remains up a robust 36.20% over the past three months, suggesting a short-term consolidation or pullback within a much larger bullish move. This divergence could signal a healthy pause for digestion after the explosive rally seen from January through February 2026. Key technical levels are clearly defined, with immediate support at the recent March low near $207.51 and major support at the 52-week low of $84.0, while resistance sits at the 52-week high of $258.98. A breakout above $259 would signal a continuation of the primary uptrend, while a sustained break below $207 could indicate a deeper correction. The stock's beta of 1.481 confirms it is approximately 48% more volatile than the broader market, a critical factor for risk-aware investors given its recent price swings.
Beta
1.48
1.48x market volatility
Max Drawdown
-22.3%
Largest decline past year
52-Week Range
$93-$262
Price range past year
Annual Return
+160.0%
Cumulative gain past year
| Period | MTSI Return | S&P 500 |
|---|---|---|
| 1m | +16.0% | +0.5% |
| 3m | +47.6% | -2.1% |
| 6m | +111.3% | +4.0% |
| 1y | +160.0% | +29.5% |
| ytd | +47.5% | -0.4% |
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MTSI Fundamental Analysis
Revenue growth has accelerated markedly, with the most recent Q1 2026 revenue reaching $271.61 million, representing a 24.52% year-over-year increase. This follows a sequential trend of growing quarterly revenues from $235.89 million in Q2 2025 to $271.61 million in Q1 2026, indicating a consistent and accelerating growth trajectory that strengthens the investment case. The company has achieved a decisive return to profitability; Q1 2026 net income was $48.77 million, a stark reversal from the net loss of -$167.53 million in Q1 2025. Gross margin has expanded to a healthy 55.88% in the latest quarter, up from 51.25% a year ago, demonstrating improved pricing power and operational efficiency. The balance sheet and cash flow position are solid, with a strong current ratio of 3.71 and a manageable debt-to-equity ratio of 0.405. The company generated $42.93 million in operating cash flow and $29.99 million in free cash flow in Q1 2026, and Trailing Twelve Month (TTM) free cash flow stands at $132.74 million, indicating the business is generating sufficient internal cash to fund its operations and growth initiatives without excessive reliance on external financing.
Quarterly Revenue
$271612000.0B
2026-01
Revenue YoY Growth
+0.24%
YoY Comparison
Gross Margin
+0.55%
Latest Quarter
Free Cash Flow
$132736999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MTSI Overvalued?
Given the company's positive net income in recent quarters, the primary valuation metric selected is the Price-to-Earnings (P/E) ratio. The trailing P/E is not meaningful due to past losses, but the forward P/E of 42.77x provides a forward-looking benchmark. This forward multiple reflects the market's expectation of continued earnings growth following the company's recovery. Compared to sector averages, MTSI's valuation appears elevated; its Price-to-Sales (P/S) ratio of 9.75x and EV-to-Sales of 17.32x are high for the semiconductor industry, suggesting the market is pricing in a significant growth premium. This premium may be justified by the company's superior recent growth rate (24.5% YoY revenue growth) and margin expansion story, but it also introduces higher risk if execution falters. Historically, the stock's own valuation has expanded dramatically with its price recovery; for instance, its P/S ratio has risen from 28.26x in Q2 2025 to 48.20x in Q1 2026 based on historical ratios data. Trading near the top of its own historical valuation band suggests the market is pricing in highly optimistic expectations for sustained growth and profitability, leaving little room for disappointment.
PE
-173.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range -15x~133x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
247.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: The primary financial risk is valuation compression, not operational weakness. The company's forward P/E of 42.8x and P/S of 9.75x are extreme premiums that require flawless execution of high growth (24.5% YoY) and margin expansion (55.9% gross margin) to justify. A deceleration in revenue growth below 20% or a margin contraction would likely trigger a severe derating. While the balance sheet is strong (D/E 0.41), the operational model is now dependent on maintaining this premium growth trajectory to support the stock price.
Market & Competitive Risks: The stock faces acute market risk from its high volatility (beta 1.48) and its extended technical position, trading at 92% of its 52-week high. A sector-wide rotation out of high-multiple growth stocks or a broader market correction could disproportionately impact MTSI. Competitive risks are inherent in the semiconductor industry, but the immediate threat is the stock's own valuation, which has disconnected from sector norms (EV/Sales 17.32x) and historical levels, making it vulnerable to a mean-reversion event.
Worst-Case Scenario: The worst-case scenario involves a simultaneous earnings miss and a broader growth stock sell-off. This could break key technical support at $207.51 and trigger a rush for exits, sending the stock back toward its 52-week low of $84.00 as the growth narrative unravels and multiples collapse. A more realistic severe downside, aligning with the recent max drawdown of -24.2%, would target a drop of 25-35% from current levels to the $155-$179 range. An investor could face a loss of 25-35% in this adverse scenario, primarily driven by multiple compression rather than business failure.
FAQ
The key risks are: 1) Valuation Compression Risk (Most Severe): The high forward P/E (42.8x) and P/S (9.75x) make the stock vulnerable to a sharp decline if growth slows. 2) Execution & Growth Risk: The investment thesis depends on sustaining >20% revenue growth; a deceleration would damage the narrative. 3) Market & Volatility Risk: With a beta of 1.48, the stock is 48% more volatile than the market, amplifying losses in a downturn. 4) Limited Coverage Risk: Only two analysts provide estimates, which can lead to higher price volatility around earnings due to less predictable consensus.
The 12-month forecast presents three scenarios. The Base Case (55% probability) sees the stock trading between $220 and $260 as it consolidates its gains, aligning with analyst EPS estimates implying steady growth. The Bull Case (25% probability) targets $275-$300 if growth accelerates further and the premium multiple holds. The Bear Case (20% probability) warns of a drop to $160-$200 if growth decelerates, triggering multiple compression. The most likely outcome is the Base Case, assuming the company meets but does not exceed the high expectations already baked into the price. The key assumption is that revenue growth stabilizes around 20%.
MTSI is overvalued based on traditional sector metrics. Its forward P/E of 42.8x and Price-to-Sales ratio of 9.75x are at a significant premium to the broader semiconductor industry. The EV-to-Sales ratio of 17.32x is particularly elevated. This valuation implies the market expects the company to sustain its high growth rate (24.5% YoY) and margin expansion (55.9% gross margin) for the foreseeable future. Compared to its own history, the stock is trading at the high end of its valuation range, with the P/S ratio having expanded from 28.3x to 48.2x in recent quarters. The market is paying a premium for the growth story.
MTSI is not a compelling buy at the current price of $238.30. While the company's fundamental recovery is impressive, with 24.5% revenue growth and a return to profitability, the stock has already rallied 129.6% over the past year, trading at a lofty forward P/E of 42.8x. This prices in near-perfect execution. For risk-tolerant investors seeking growth, it could be a good buy on a significant pullback (e.g., below $200) that improves the risk/reward. However, for most investors, the high valuation and volatility (beta 1.48) make it a Hold, not a Buy.
MTSI is more suitable for a medium-term investment horizon (1-3 years) rather than very long-term holding or short-term trading. Its high beta (1.48) and lack of a dividend make it unsuitable for income-focused or low-volatility portfolios. Long-term potential depends on the sustainability of its growth, which is currently unproven at this scale. Short-term trading is risky due to the stock's volatility and extended technical position. Investors should have a minimum horizon of 12-18 months to allow for the company to execute on its growth plans and for the valuation to potentially normalize. It is not a set-and-forget long-term holding at this stage.