MACOM stock: strong growth still leaves little room for a stumble
MTSI stock analysis and fair value · bull and bear case
The call: SageNoodle rates MACOM Technology Solutions Holdings Overvalued: base-case fair value USD 250 against a price of USD 330, 24% below the quote. MACOM’s latest reported quarter showed accelerating revenue, higher margins and a strong company forecast for fiscal Q4, supporting the operating thesis.
MACOM stock is down 4.2% at $335.91, but the reason for today’s move is unclear. Strong quarterly growth and an upbeat company forecast sit beside a valuation that already prices in substantial progress.
Valuation as of 8 Oct 2026 · Quote currency: USD. Latest quote: Fri, 09 Oct 2026 19:15:47 GMT.
Written with AI from the linked sources and reviewed by a SageNoodle editor. How we work.
Latest quote
USD 329.84
At publication
USD 335.91
Fair value
USD 250.00
Upside
-24.2%
P/E at publication
107.0x
EV/EBITDA
Not available
FCF yield
0.8%
ROIC 6.2% · Horizon Long term, with the next evidence point being fiscal Q4 results
Why MACOM Technology Solutions Holdings (MTSI) stock is mispriced
- 01
MACOM’s latest reported quarter showed accelerating revenue, higher margins and a strong company forecast for fiscal Q4, supporting the operating thesis.
- 02
At $335.91, the shares are expensive against trailing earnings and free cash flow; a preliminary scenario valuation puts fair value near $250 per share, leaving little room for slower growth.
What MACOM Technology Solutions Holdings does and how it makes money
MACOM Technology Solutions Holdings, Inc. (MTSI) designs and manufactures high-performance semiconductor products for industrial and defense, data center, and telecommunications customers. It sells RF, microwave, analog and mixed-signal, and optical technologies to more than 6,000 customers annually, with facilities across the United States, Europe and Asia, according to the company’s fiscal third-quarter 2026 earnings release. Its mix spans end markets with different demand cycles; the release does not provide revenue by individual product or customer in the text available here. The investment case therefore turns on whether reported growth and margin expansion can continue, not on a single market label.
For the financial history and all coverage, see MACOM Technology Solutions Holdings, Inc. (MTSI) company research.
What explains MACOM stock’s move today?
MACOM stock is down 4.2% at $335.91 on October 8, 2026, according to the price data. The cause is unclear: the recent headlines provided are mainly stock-news or valuation-page listings, and none supplies a verified new company announcement explaining today’s decline. The reported absence of Reddit mentions does not establish why shares moved.
MACOM reported revenue of $342.2 million for the quarter ended July 3, up 35.8% year over year and 18.4% from the prior quarter. GAAP gross margin rose to 58.3% from 55.3% a year earlier, while operating margin reached 22.5%, according to the earnings release. That is an operating update worth understanding, but it cannot be presented as the confirmed cause of a move two months later.
The forecast raises the bar for the next quarter
Management’s August outlook called for fiscal Q4 revenue of $415 million to $425 million and adjusted diluted EPS of $1.97 to $2.03. The revenue range implies roughly 21% to 24% growth from Q3’s $342.2 million, calculated by dividing each end of the guidance range by Q3 revenue and subtracting one. That is a demanding near-term pace, and it remains guidance, not a reported result.
The distinction between adjusted and GAAP earnings matters. In Q3, adjusted operating income was $107.7 million, or 31.5% of revenue, versus GAAP operating income of $77.1 million, or 22.5%. The company’s reconciliation identifies share-based compensation, amortization and acquisition-related costs among the adjustments. Investors can reasonably use adjusted figures to assess operating trends, but those costs do not disappear from the economics for shareholders. The release also says MACOM could not reliably estimate certain inputs needed to reconcile its forward-looking non-GAAP measures to GAAP.
What is MACOM worth at $335.91?
The trailing metrics put MTSI at 107.0 times earnings, with a 0.8% free-cash-flow yield and 6.2% FY2026 ROIC. Those numbers describe a company delivering growth, but they also show how much future success the share price asks buyers to underwrite. A small setback to growth or margins can matter disproportionately at that entry price.
There is no prior SageNoodle fair value, so this is a preliminary earnings-multiple exercise, not a full discounted cash-flow estimate. The base case assumes $5.00 of normalized future annual EPS and a 50-times multiple, yielding $250 per share. That EPS is an analyst assumption, not company guidance. At 78.9 million diluted shares, the implied equity value is $19.725 billion ($250 × 78.9 million). Bear and bull assumptions are shown in the scenarios. The base estimate is below the current price; the valuation says the stock is expensive, not that today’s decline has a known explanation.
The longer-term thesis is intact but conditional: fiscal Q3’s sales and margin gains support the case for a growing specialist chip supplier. It does not remove the risk that a high valuation assumes continued execution. The August 6 Form 10-Q provides the fuller filing context; the attached text does not establish a new October 8 operating event.
The next test is delivery, not attention
The practical evidence point is fiscal Q4, which management said would end October 2, 2026. Results will show whether revenue landed within the $415 million to $425 million outlook and whether adjusted gross margin reached its forecast range of 60.0% to 61.0%. A miss would challenge the near-term growth assumptions embedded in the share price; delivery would support the operating story, though it would not by itself settle the valuation question.
Until a company filing or release ties a new development to the share move, the honest answer to why MACOM is down today is that the cause is unverified. The reported quarterly performance is strong; the price leaves little slack if the next step is merely good instead of better.
Follow SageNoodle on Google
MACOM Technology Solutions Holdings revenue, margins and cash flow
Revenue (USD, billions)
Margins (%)
Free cash flow (USD, billions)
Estimated ROIC (%)
Net debt (USD, billions)
Monetary values are in USD; revenue, FCF and net debt are in billions; EPS is per share. Missing values appear as gaps and “Not available.” Source: SEC EDGAR XBRL filings, latest restated values; quarterly cash flow derived from year-to-date figures; Q4 = fiscal year minus nine months. ROIC is NOPAT (21% tax) over debt plus equity.
| Period | Revenue | Gross % | Op % | FCF | EPS | ROIC % | Net debt |
|---|---|---|---|---|---|---|---|
| FY2016 | 0.54 | 51.7 | 2.43 | 0.05 | 0.03 | 1.01 | 0.24 |
| FY2017 | 0.70 | 46.8 | -2.30 | 0.03 | -2.79 | -0.88 | 0.53 |
| FY2018 | 0.57 | 43.1 | -18.7 | -0.02 | -2.57 | -6.34 | 0.56 |
| FY2019 | 0.50 | 44.2 | -76.1 | -0.02 | -5.84 | -31.0 | 0.58 |
| FY2021 | 0.53 | 51.0 | 0.64 | 0.15 | -0.69 | 0.28 | 0.52 |
| FY2022 | 0.61 | 56.3 | 13.3 | 0.13 | 0.54 | 6.64 | 0.34 |
| FY2022 | 0.68 | 60.2 | 19.6 | 0.15 | 6.18 | 7.44 | 0.45 |
| FY2023 | 0.65 | 59.5 | 16.6 | 0.14 | 1.28 | 6.08 | 0.27 |
| FY2024 | 0.73 | 54.0 | 10.1 | 0.14 | 1.04 | 3.70 | 0.30 |
| FY2026 | 0.97 | 54.7 | 13.4 | 0.19 | -0.73 | 6.15 | 0.23 |
What MACOM Technology Solutions Holdings management has said
Guidance
Direct quote
“For the fiscal fourth quarter ending October 2, 2026, MACOM expects revenue to be in the range of $415 million to $425 million.”
MACOM Technology Solutions Holdings fair value: bear, base and bull scenarios
Dot marks the latest quote of USD 329.84.
Bear
25%USD 140
Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.
Equity value USD 11.05B ÷ 0.079B diluted shares
- Normalized annual EPS
- $4.00, analyst assumption
- P/E multiple
- 35x, analyst assumption
- Diluted shares
- 0.0789 billion, based on company Q4 outlook diluted-share count of 78.9 million
- Net debt adjustment
- None; direct equity valuation
Growth and margin momentum cool after the forecast quarter and the market assigns a lower multiple. The valuation reflects $4.00 assumed EPS × 35, or $140 per share.
Base
55%USD 250
Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.
Equity value USD 19.73B ÷ 0.079B diluted shares
- Normalized annual EPS
- $5.00, analyst assumption
- P/E multiple
- 50x, analyst assumption
- Diluted shares
- 0.0789 billion, based on company Q4 outlook diluted-share count of 78.9 million
- Net debt adjustment
- None; direct equity valuation
The business sustains growth, but the valuation multiple moderates from its current level. Assumed $5.00 EPS × 50 gives $250 per share.
Bull
20%USD 380
Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.
Equity value USD 29.98B ÷ 0.079B diluted shares
- Normalized annual EPS
- $6.00, analyst assumption
- P/E multiple
- 63.33x, analyst assumption
- Diluted shares
- 0.0789 billion, based on company Q4 outlook diluted-share count of 78.9 million
- Net debt adjustment
- None; direct equity valuation
Strong growth and margins persist and investors continue to pay a premium multiple. Assumed $6.00 EPS × 63.33 gives approximately $380 per share.
MACOM Technology Solutions Holdings (MTSI) stock: bullish vs bearish case
Bull case
- Fiscal Q3 revenue grew 35.8% year over year and 18.4% sequentially.
- GAAP gross margin improved to 58.3% from 55.3% year over year, while operating margin rose to 22.5%.
- Management’s fiscal Q4 revenue and adjusted EPS outlook implies continued rapid growth.
Bear case
- At 107.0 times trailing earnings and a 0.8% trailing free-cash-flow yield, the shares leave little room for weaker growth or margins.
- Adjusted operating results exclude costs including share-based compensation; GAAP operating margin was materially below the adjusted figure in Q3.
MACOM Technology Solutions Holdings stock risks
| Risk | Severity | Probability | Rationale |
|---|---|---|---|
| Valuation compression | High | Medium | A high trailing earnings multiple makes the share price sensitive to slower growth, lower margins or a reduced market multiple. |
| Execution against fiscal Q4 outlook | High | Medium | The company forecast revenue of $415 million to $425 million and adjusted gross margin of 60.0% to 61.0%; those targets remain unreported outcomes. |
| Adjusted-to-GAAP earnings gap | Medium | Medium | Q3 adjusted operating income was $107.7 million compared with GAAP operating income of $77.1 million. Excluded costs, including share-based compensation, remain relevant to shareholder returns. |
MACOM Technology Solutions Holdings catalysts: what could move MTSI stock
- Fiscal Q4 2026, quarter ended October 2, 2026; results date not suppliedNeutral
Report against fiscal Q4 outlook
The company forecast revenue of $415 million to $425 million, adjusted gross margin of 60.0% to 61.0%, and adjusted diluted EPS of $1.97 to $2.03.
MACOM Technology Solutions Holdings fair value history
| Period | Fair value | Verdict | Note |
|---|
MACOM Technology Solutions Holdings news
MACOM Technology Solutions Holdings stock: common questions
- Is MACOM Technology Solutions Holdings (MTSI) stock undervalued or overvalued?
- SageNoodle rates MACOM Technology Solutions Holdings Overvalued: base-case fair value USD 250 against a price of USD 330, 24% below the quote. MACOM’s latest reported quarter showed accelerating revenue, higher margins and a strong company forecast for fiscal Q4, supporting the operating thesis.
- What is MACOM Technology Solutions Holdings's fair value?
- Bear USD 140 (25% probability, Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.); Base USD 250 (55% probability, Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.); Bull USD 380 (20% probability, Direct equity valuation using assumed normalized annual EPS multiplied by an assumed earnings multiple.). The business sustains growth, but the valuation multiple moderates from its current level. Assumed $5.00 EPS × 50 gives $250 per share.
- What is the bull case for MTSI stock?
- Fiscal Q3 revenue grew 35.8% year over year and 18.4% sequentially. GAAP gross margin improved to 58.3% from 55.3% year over year, while operating margin rose to 22.5%. Management’s fiscal Q4 revenue and adjusted EPS outlook implies continued rapid growth.
- What is the bear case for MTSI stock?
- At 107.0 times trailing earnings and a 0.8% trailing free-cash-flow yield, the shares leave little room for weaker growth or margins. Adjusted operating results exclude costs including share-based compensation; GAAP operating margin was materially below the adjusted figure in Q3.
- What are the biggest risks to MACOM Technology Solutions Holdings stock?
- Valuation compression (High severity): A high trailing earnings multiple makes the share price sensitive to slower growth, lower margins or a reduced market multiple. Execution against fiscal Q4 outlook (High severity): The company forecast revenue of $415 million to $425 million and adjusted gross margin of 60.0% to 61.0%; those targets remain unreported outcomes. Adjusted-to-GAAP earnings gap (Medium severity): Q3 adjusted operating income was $107.7 million compared with GAAP operating income of $77.1 million. Excluded costs, including share-based compensation, remain relevant to shareholder returns.
- What could move MTSI stock next?
- Fiscal Q4 2026, quarter ended October 2, 2026; results date not supplied: Report against fiscal Q4 outlook. The company forecast revenue of $415 million to $425 million, adjusted gross margin of 60.0% to 61.0%, and adjusted diluted EPS of $1.97 to $2.03.
Company reference pages
Browse company filings and market quotes to check the latest information. These pages update over time and are separate from the documents cited in this report.