MACOM Technology Solutions Holdings, Inc. (MTSI): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/MTSI

Headline

Field	Value
Ticker	MTSI
Company	MACOM Technology Solutions Holdings, Inc.
Current price	$229.24/sh
Composition	Industrial & Defense 43% / Data Center 30% / Telecom 26%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Must persist for	21.6y
Multiple paid	104x operating income

Solve inputs: computed at a 11.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.9 years.

Reconcile: at the x-ray's 9.3% required return this reads ~15.3 years; the models below use their own rates.

How unusual the bet is: high

Reference	Value
vs own history	+0.26σ
cohort percentile (of 190 peers)	100
sustained it ~10 years at this level	15%
implied end-window share	0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	7.96x	4	expensive
Earnings	9.18x	4	expensive
Relative	2.74x	5	expensive
Growth	1.02x	3	expensive

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=16)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$106.75	2.15x	yes	FCF base $0.2B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection
DCF Exit Multiple	Growth	$247.31	0.93x	yes	Exit EV/EBITDA: 74.3x / 76.3x / 78.3x (bear / base = today's held flat / bull), 7yr
Relative Valuation	Relative	$112.53	2.04x	yes	P/E 45.57x (blended: static sector reference 22x + trailing (TTM) 101x), scenarios: 36.7x / 45.6x / 54.5x (bear / base = reference held flat / bull), EV/EBITDA 34.1x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$24.64	9.30x	yes	BV/sh $18.28, ROE (TTM) 12.5%, ke 9.3%
Two-Stage Excess Return	Asset	$28.40	8.07x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$225.81	1.02x	yes	Rev $1.1B, growth 27% (input: historical growth; tapered), Terminal P/S: 9.7x / 12.0x / 14.3x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$83.65	2.74x	yes	EPS $2.39, growth 35% (input: historical EPS growth), PEG=2.87 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$10.28	22.30x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.12B × (1−19%) / WACC 9.2% → EPV (no growth) (excluded from median)
Residual Income	Asset	$29.18	7.86x	yes	BV $18.28 + 5yr PV of (ROE (TTM) 12.5% − Kₑ 9.3%) × BV; BV grows 8.1%/yr
Graham Number	Asset	$31.35	7.31x	yes	√(22.5 × EPS $2.39 × BVPS $18.28) — Graham's conservative floor
EV/EBITDA Relative	Relative	$45.52	5.04x	yes	EBITDA $0.24B × sector EV/EBITDA 16.0x
FCF Yield	Earnings	$24.18	9.48x	yes	FCF $196.4M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$13.05	17.57x	yes	SBC-adj FCF $0.12B (FCF $0.20B − SBC $0.08B) capitalized at Kₑ
Ben Graham Formula	Earnings	$77.12	2.97x	yes	EPS $2.39 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$4.96	46.22x	yes	BV $18.28 × (ROIC 2.5% / WACC 9.2%) (excluded from median)
P/Sales Sector	Relative	$69.23	3.31x	yes	Revenue $1.07B × sector P/S 5.0x
PEG Fair Value	Relative	$89.62	2.56x	yes	EPS $2.39 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$25.84	8.87x	yes	EPS $2.39 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net cash	$293.8m
Net debt / NOPAT (after-tax)	-2.11x (net cash)
Net debt / operating income (pre-tax)	-1.71x (net cash)
Share count CAGR (dilution)	2.2%
Burning cash	no

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• MACOM designs RF, microwave, and photonic semiconductors, and its edge is integration, matching its "opto-electronic components to our laser and photodetector products" so customers can buy more complete solutions for high-speed optical links.
• The biggest risk is the valuation: the stock trades at well over 100x trailing operating income, a multiple that prices many years of near-ceiling growth and that every static method calls far above fundamentals.
• Watch the data-center ramp, where AI optical demand for 800G and 1.6T products is driving record bookings and management now guides over 60% segment growth for the fiscal year.

Bull Case

The bull case is built on a specific kind of moat: MACOM does not just sell discrete components, it integrates them into solutions customers cannot easily assemble themselves. The 10-K describes how the company matches its "opto-electronic components to our laser and photodetector products enabling our customers to buy more complete solutions" for high-speed optical connectivity. In RF, microwave, and photonics, that systems-level integration, combined with a long history of design wins in defense and telecom, creates switching costs: once a MACOM part is designed into a radar system or an optical module, it stays there for the product's life.

The growth engine right now is the data center, riding the AI infrastructure buildout. In its most recent quarter, MACOM grew revenue 22.5% year over year to $289 million, with the Data Center segment up about 14.5% sequentially to $98.2 million on record bookings for high-speed optical modules, specifically 800G and 1.6T PAM4 products. These are the optical interconnects that move data between AI accelerators and across hyperscale networks, one of the fastest-growing demand pools in semiconductors. Management raised full-year guidance, now expecting data-center revenue to grow over 60%, and guided next-quarter revenue to $331 to $339 million, well above what the street expected.

The second leg is industrial and defense, where MACOM supplies semiconductor content for radar, missile systems, and electronic warfare. Defense demand is structurally rising and far less cyclical than commercial chips, giving the business a stable base under the faster-growing data-center layer. The balance sheet is pristine: MACOM holds a net cash position of about $294 million with no leverage to worry about, which means it can fund growth, design teams, and the occasional acquisition entirely from its own resources. The bull case is an integrated RF-and-photonics specialist with a genuine moat, leveraged directly to AI optical demand, and the financial strength to press the advantage.

Bear Case

The structural problem is not the balance sheet, which is clean, but the valuation built on top of it, and the way every method recoils from the price. Group the valuation lenses into families and the verdict is unanimous: the asset-value methods read the stock at more than thirteen times where book value and returns justify, the earnings-power methods at more than fifteen times normalized profit, and even the peer-multiple methods at nearly five times the sector multiple. No family reaches the price. The trailing P/E sits near 172x. When the only model that gets anywhere near the price is the one extrapolating peak growth, and it requires holding a 129x exit EBITDA multiple flat for seven years, the price has detached from any conventional anchor.

The scale of the embedded bet is the heart of the concern. At over 100x operating income, the price implies growth held near the self-funding ceiling for roughly twenty-eight years, a persistence essentially no company achieves; only about 15% of comparable fast-growers have sustained that pace for even a decade. The current operating margin of 16% and trailing EPS of $2.39 are real but small relative to the price, and the AI-optical demand driving the data-center surge is itself the most cyclical, most competitive corner of semiconductors. The 10-K warns that risks "may be particularly acute in the semiconductor industry, where cyclical demand patterns and rapid technological changes can amplify economic headwinds". AI optical demand has been a one-way trade; semiconductor history says it will not stay that way.

The competitive and supply dynamics add fragility the price ignores. MACOM competes against far larger optical and RF players, and the 10-K notes that suppliers can favor higher-volume customers "in times of capacity constraint," leaving MACOM unable to fully supply demand it could otherwise have captured. Customer concentration in the data-center segment means a single hyperscaler's inventory adjustment can swing results. The market has already shown some unease: the stock fell roughly 7% even after the quarter beat, and the consensus analyst price target, near $305, sits well below the current price. The bet is that a cyclical, competitive semiconductor business sustains hypergrowth for decades at a multiple that leaves no room for the cycle to ever turn.

Valuation

MACOM's price makes the most extreme bet in this group. At $390.95 (June 27, 2026), the stock trades at well over 100x trailing operating income, which inverts into an assumption of growth held near the self-funding ceiling for roughly twenty-eight years. The framework labels that elevated, and the historical record is stark: only about 15% of comparable fast-growers have sustained such growth for even ten years, let alone the duration the price implies. The trailing operating margin of 16% and EPS of $2.39 are healthy for a specialty semiconductor maker, but they are a fraction of what the price requires the business to become.

The disagreement among the methods is not really a disagreement at all; it is a chorus saying the same thing. No valuation family reaches the price. The asset-value lens lands near $25 to $29, the earnings-power lens near $24 to $26 on a zero-growth basis, and the peer-multiple lens near $45 to $118. Only the exit-multiple DCF reaches the price, and it does so only by holding an extraordinary 129x EBITDA multiple flat for seven years, which is less a valuation than a restatement of the current price. The honest read is that the price is a bet beyond what any standard frame supports, resting entirely on the AI-optical growth story compounding far longer and far faster than the methods will credit.

The peer cohort, semiconductor names like Monolithic Power, Rambus, and Silicon Labs, trades at premium multiples too, but MACOM sits well above even that group on every static measure. The one genuine comfort in the picture is solvency: a net cash position of about $294 million means there is no leverage risk, no refinancing wall, and no balance-sheet fragility, so the entire risk is concentrated in the price rather than the capital structure. The decisive variable is the durability and pace of data-center growth: whether AI optical demand for 800G and 1.6T products sustains the trajectory long enough to grow into a multiple that, on every conventional method, sits far above the company's demonstrated economics.

Catalysts

The second-quarter fiscal 2026 results, reported in early June, were the key recent event and they beat on the metrics that matter. Revenue rose 22.5% year over year to $289 million, ahead of expectations, with adjusted EPS of $1.09 edging past estimates. The Data Center segment led, up about 14.5% sequentially to $98.2 million on record bookings for high-speed optical modules, particularly 800G and 1.6T PAM4 products that serve AI networking.

Guidance was the bigger signal. Management raised full-year expectations, now projecting data-center revenue to grow over 60% for the fiscal year, and guided third-quarter revenue to $331 to $339 million, well above the roughly $300 million consensus. The Industrial and Defense segment continued to grow on demand for semiconductor content in radar, missile systems, and electronic warfare, a steadier complement to the faster data-center ramp.

The market reaction captured the valuation tension: despite the beat and raised guidance, the stock fell roughly 7%, a sign that even strong execution struggles to justify the multiple. The consensus analyst rating is Buy, but price targets near $305 sit below the current price. The next quarterly print is the test of whether the data-center momentum holds at the pace management has guided, the single variable that the elevated valuation depends on.

Peer Cohorts (Per Segment, With Filing Citations)

Semiconductors and modules (reported)

• QRVO (Qorvo, Inc.)
• FY2025 10-K: …dynamic has evolved as chipset suppliers have worked to develop more fully integrated solutions that include their own RF technologies and components. Chipset suppliers may be in a different business from ours or we may be their customer or direct competitor. Accordingly, we must balance our interest in obtaining new…
• FY2025 10-K: …affect our operating results through lower prices for our products, reduced demand for our products, losses of existing design slots with key customers and a corresponding reduction in our ability to recover development, engineering and manufacturing costs. For example, due to lower profitability from increased…
• SWKS (SKYWORKS SOLUTIONS, INC.)
• FY2025 10-K: …and modules is highly complex and depends on numerous factors, including the ability: • to anticipate customer and market requirements and changes in technology and industry standards, • to obtain sufficient manufacturing capacity within an international supply chain to meet customer demand, • to define new products…
• FY2025 10-K: …establish, financial, contractual, or strategic relationships among themselves or with customers, resellers, or other third parties. These relationships have affected and may continue to affect customers' purchasing decisions, which has led to and could lead to customers choosing to purchase competitor products…
• SMTC (SEMTECH CORP)
• FY2025 10-K: …these market trends by providing solutions that are ultra-low power thereby extending battery life, small form factor enabling smaller more autonomous and connected devices, highly integrated enabling more functionality within devices, and high-performance enabling product differentiation within our customer base.…
• FY2025 10-K: Segment Information, to our Consolidated Financial Statements). Signal Integrity. We design, develop, manufacture and market a portfolio of optical and copper data communications and video transport products used in a wide variety of infrastructure and industrial applications. Our comprehensive portfolio includes…
• SLAB (SILICON LABORATORIES INC.)
• FY2025 10-K: …in mixed-signal ICs is the result of the breadth of engineering talent we have assembled with experience working in analog-intensive CMOS design for a wide variety of applications. This expertise, which we consider a competitive advantage, is the foundation of our in-depth understanding of the technology and trends…
• FY2025 10-K: …in our backlog are subject to changes in delivery schedules or cancellation at the option of the purchaser, typically without penalty. Our backlog may fluctuate significantly depending upon customer order patterns which may, in turn, vary considerably based on rapidly changing business circumstances. Accordingly, we…
• CRUS (Cirrus Logic, Inc.)
• FY2025 10-K: …deposits or if a depository institution is subject to other adverse conditions in the financial or credit markets, there is no guarantee that we have access to such uninsured deposits, which could restrict access to our cash or cash equivalents and could adversely impact our operating liquidity, financial condition,…
• FY2025 10-K: …ability to compete effectively and to expand our business will depend on our ability to continue to recruit key engineering talent, execute on new product developments, partner with customers to create compelling products for their applications and provide cost efficient versions of existing products. We compete with…
• MPWR (MONOLITHIC POWER SYSTEMS INC)
• FY2025 10-K: …partners utilize prior to shipping to our customers. The manufacturing facilities we utilize in Asia enable us to benefit from shorter manufacturing cycle times and lower labor and overhead costs. We have expanded our product testing capabilities in these facilities and are able to take advantage of the rich pool of…
• FY2025 10-K: …of such products. We consider our primary competitors to include Analog Devices, Infineon Technologies, NXP Semiconductors, ON Semiconductor, Power Integrations, Renesas Electronics, ROHM Semiconductor, Semtech, STMicroelectronics and Texas Instruments. 9 Table of Contents We expect continued competition from…
• VICR (VICOR CORPORATION)
• FY2025 10-K: …Generally, we compete with developers and manufacturers of integrated circuits and semiconductor-based modules when addressing the needs of customers in enterprise computing and other market segments with implementations of our proprietary Factorized Power Architecture TM ("FPA") using Advanced Products. In contrast,…
• FY2025 10-K: …and price competition. As such, Brick Products are positioned with an emphasis on mass customization, through which we offer products with specific features and performance profiles typically not available from catalog-oriented competitors. The size and growth characteristics of the markets we serve with Advanced…
• DIOD (DIODES INC /DEL/)
• FY2025 10-K: …and does not, imply a relationship with, or endorsement or sponsorship of us by, the trade name or trademark owners. All trademarks appearing in this Annual Report not owned by us are the property of their holders. COMPETITION Numerous s emiconductor manufacturers and distributors serve the discrete, logic, analog,…
• FY2025 10-K: …of Financial Condition and Results of Operations - Business Outlook" in Part II, Item 7 and "Risk Factors - The success of our business depends on the strength of the global economy and the stability of the financial markets, and any weaknesses in these areas may have a material adverse effect on our net sales,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

MTSI FY2025 10-K · MACOM Q2 FY2026 results, June 2026 · Insider Monkey, 2026 · Sahm Capital, June 2026