Key Takeaways
- MACOM shares rose 6% today after Raymond James upgraded the stock to Outperform with a $300 price target.
- The firm sees the stock’s 30% fall since the start of October as a buying opportunity, and the outlook MACOM gave in August backs that up.
- Even after today’s jump, MACOM’s forward P/E is below its five-year average, and analysts expect earnings per share to grow 55% in fiscal 2027.
- MACOM reports on Nov. 5, after guiding to fiscal fourth-quarter revenue of $415 million to $425 million.
MACOM Technology Solutions (MTSI) shares jumped 6% today after Raymond James upgraded the chipmaker to Outperform from Market Perform, with a $300 price target.
Analyst Melissa Fairbanks made the call ahead of MACOM’s September-quarter results. She sees the stock’s 30% fall since the start of October as a reason to get more constructive, and a broad rally in chip stocks today didn’t hurt either.
Caught in the AI Rotation
Fairbanks thinks the selloff says more about the market than about MACOM. “Lately, shares have been caught up in the broad AI rotations in the market, which we feel is only partially warranted,” she wrote. Her case also reaches past data centers to MACOM’s “exposure to high-value space, defense and communications applications.”
The business backs her up. In its fiscal third quarter, which ended July 3, revenue grew 35.8% from a year earlier to $342.2 million, with adjusted EPS of $1.40. For the fourth quarter, which ended Oct. 2, management guided to revenue of $415 million to $425 million and adjusted EPS of $1.97 to $2.03.
TIKR Tracks 16 Analysts on MACOM Technology Solutions. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on MACOM Technology Solutions, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See MACOM Technology Solutions’ Analyst Ratings
MACOM Stock Got Cheaper, but the Growth Didn’t Slow
The slide has dragged MACOM’s forward P/E from a five-year high of 66x in May down to 30x at Monday’s close, below its five-year average of 32x:
After today’s jump, it’s closer to 31x.
And analysts expect earnings to keep climbing fast:
That $5.51 for fiscal 2026 is roughly what MACOM’s first three quarters plus the middle of its guidance add up to. So the September quarter just has to land where management said it would. The bigger ask is fiscal 2027’s $8.54, a 55% jump.
Does Raymond James’s $300 Add Up?
The $300 target works out to about 35x that fiscal 2027 estimate, a little above the stock’s five-year average. It’s also about 23% above Monday’s close.
The catch is that this multiple moves fast in both directions. In May it was more than double today’s level, and if data center orders cool, it could keep falling.
I think Raymond James has this one right. Around 30x is a bargain for earnings expected to grow 55% next year, especially from a company that has guided to its biggest quarter yet. And getting to $300 only takes a slightly richer multiple than MACOM usually gets.
It all comes down to Nov. 5, when MACOM reports before the open. Its outlook for the December quarter will show whether that 55% is realistic.
So what is MACOM stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what MACOM could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
