MACOM Technology Solutions Holdings Inc. Common Stock (MTSI)

FairStock Score: 35/100 — MIXED

Key Financials

Strengths

• Generates $60 million in annual free cash flow (0.3% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 12.9% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.42, providing financial flexibility
• Altman Z-Score of 17.5 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($30) with negative 841% margin of safety—limited downside protection

AI Analysis

MACOM Technology Solutions Holdings Inc. Common Stock is a mid-cap technology company valued at $21.2 billion. The business generates $1.0 billion in annual revenue with a 4.8% net margin and $60 million in free cash flow. From a quality standpoint, MACOM shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 17.5 confirms fortress-level solvency. On valuation, the stock is commanding a steep 128.1x multiple, with trades far above its Graham Number ($30) with no margin of safety. Growth dynamics show revenue growing at 24.5% and profit growth of 129.1%. Our composite FairStock Score of 38/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

MACOM's 25% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $60 million in annual free cash flow (0.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 128x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer