Finance Halo
Company Overview
MACOM Technology Solutions Holdings, Inc. (MTSI) is a global provider of semiconductor solutions, specializing in high-performance analog and mixed-signal devices. The company's products are critical components in a wide range of applications, including cloud data centers, industrial, automotive, and mobile networks. MTSI is recognized for its strong position in high-growth markets, particularly in optical and radio frequency (RF) technologies, serving a global customer base.
Price Action Analysis
Daily Chart (3-month, 1-day interval): The daily chart shows a recent strong upward price movement, indicating a potential breakout from a consolidation pattern. Prior to this surge, the stock exhibited a period of tight consolidation between approximately $160 and $180, characterized by moderate trading volume. The recent breakout on January 11th was accompanied by a significant spike in volume, suggesting strong conviction behind the move. The price action shows a decisive move above the prior resistance.
Weekly Chart (2-year, 1-week interval): The weekly chart reveals a longer-term uptrend that was briefly interrupted by a period of consolidation. The stock has been in a gradual uptrend since early 2023, with several phases of consolidation and subsequent advances. The most recent price action represents a significant breakout above a key resistance level that had previously capped gains. The surge in volume on the weekly chart, especially in the most recent weeks, confirms the strength of this upward momentum. This breakout appears to be the most significant in the past two years.
News & Catalysts
- "MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) Q1 2024 Earnings Call Transcript" (Source: The Motley Fool, January 31, 2024) - This transcript details the company's first-quarter financial performance, including revenue, earnings per share, and guidance. Positive commentary on demand and operational execution in key markets like data centers and 5G likely contributed to investor confidence and may have influenced recent price action.
- "MTSI Stock Pops After Q1 Earnings Beat; Analyst Raises Price Target" (Source: Investor's Business Daily, February 1, 2024) - This report highlights MACOM's better-than-expected first-quarter results and an increased price target from an analyst. Such positive analyst revisions often act as a catalyst, attracting further investor interest and potentially driving the stock higher. The mention of a raised price target suggests analysts see further upside potential.
- "MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) Q1 2024 Earnings Preview" (Source: Zacks Equity Research, January 29, 2024) - Prior to the earnings release, this preview likely discussed key trends and expectations for MTSI. Positive pre-earnings sentiment and anticipation of strong results could have contributed to the build-up in volume and price stability observed before the breakout.
Fondamental analysis
Key Financial Metrics
| Metric | Value | YoY Change |
|---|---|---|
| Revenue | $279.20M | +8.90% |
| Gross Profit | $138.20M | +19.10% |
| Net Income | $63.90M | +42.80% |
| Diluted EPS | $0.67 | +42.80% |
| EBITDA | $100.50M | +34.40% |
| Free Cash Flow | $70.10M | +39.20% |
Valuation & Profitability
| Metric | Value |
|---|---|
| Price/Sales (TTM) | 6.17 |
| Price/Earnings (TTM) | 29.7 |
| Price/Book (TTM) | 4.59 |
| Return on Equity (TTM) | 15.7% |
| Gross Margin (TTM) | 49.5% |
| Operating Margin (TTM) | 26.0% |
| Net Margin (TTM) | 22.9% |
Analyst Estimates & Guidance
| Metric | Current Estimate (Q2 2024) | YoY Growth |
|---|---|---|
| Revenue | $285.00M | +6.00% |
| Diluted EPS | $0.69 | +15.00% |
Ownership
| Holder Type | % Ownership |
|---|---|
| Institutional Holders | 98.10% |
| Insider Ownership | 1.10% |
Key Takeaways: MTSI demonstrates strong financial health with robust revenue and earnings growth, significantly outpacing previous periods. Profitability metrics, including margins and EPS, show considerable improvement. The company is trading at a premium valuation, reflective of its growth prospects. Analyst estimates for the upcoming quarter are positive, suggesting continued expansion. High institutional ownership indicates significant analyst and fund manager confidence.
Market & Sentiment Context
Market Context: The semiconductor industry, particularly segments focused on high-performance computing, data centers, and advanced connectivity (like 5G), is experiencing robust demand. Broader market trends favor growth stocks with strong earnings momentum and technological innovation, aligning with MTSI's market position.
Investor Sentiment: The recent price action, characterized by a significant breakout on high volume, strongly suggests positive investor sentiment and accumulation. This indicates that buyers are actively entering the market, confident in the stock's upward trajectory. The tight consolidation pattern prior to the breakout further supports the notion of building buying pressure with limited selling interest.
Investment Outlook
The recent breakout in MTSI, supported by strong volume and positive fundamental data, presents a compelling investment opportunity. The company's solid financial performance, leadership in key growth markets, and positive analyst sentiment create a favorable outlook. The breakout above prior resistance levels suggests the potential for further upside, targeting new highs.
Key Buy/Sell Levels
Current Price: $213.52
Support Levels:
- $195: This level represents the previous resistance that MTSI has now broken through, likely serving as a key support area. It has not been touched since the breakout.
- Distance from current price: -$18.52 (-8.67%)
- $177: This marks the upper boundary of the prior consolidation range and a significant psychological level. It has not been touched since the breakout.
- Distance from current price: -$36.52 (-17.10%)
Resistance/Target Levels:
- $218: This is the immediate resistance level, forming the high of the current breakout candle.
- $230: This is a potential near-term upside target, based on extending the prior consolidation range's height.
These levels are drawn on the chart to visualize potential areas of interest for support and resistance. The strong volume accompanying the breakout suggests that these support levels, particularly $195, could hold if any pullback occurs. The $218 and $230 levels represent potential targets as the price moves into uncharted territory.
Summary & Takeaways
MACOM Technology Solutions Holdings, Inc. (MTSI) is exhibiting strong bullish momentum, evidenced by a significant breakout from a tight consolidation pattern on high volume. This technical setup is corroborated by robust fundamental performance, including healthy revenue and earnings growth, and positive analyst sentiment. The company operates in attractive, high-growth semiconductor markets.
The key support levels to watch are $195 and $177, representing the prior resistance and consolidation boundaries, respectively. Potential upside targets are identified at $218 and $230. Investors should monitor the stock's ability to hold above the $195 support level as an indicator of sustained breakout strength.