MACOM (MTSI): Buy, Sell, or Hold Post Q2 Earnings?

Jabin Bastian Sat, August 15, 2026 at 4:53 PM EDT 3 min read **

• MTSI

MACOM (MTSI): Buy, Sell, or Hold Post Q2 Earnings? MACOM currently trades at $308.10 and has been a dream stock for shareholders. It's returned 404% since August 2021, blowing past the S&P 500's 72.8% gain. The company has also beaten the index over the past six months as its stock price is up 26.2% thanks to its solid quarterly results.

Is now still a good time to buy MTSI? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it's free.

Why Does MTSI Stock Spark Debate?

Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.

Two Things to Like:

1. Skyrocketing Revenue Shows Strong Momentum

Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, MACOM's sales grew at an impressive 14.2% compounded annual growth rate over the last five years. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.

MACOM Quarterly Revenue

2. Projected Revenue Growth Is Remarkable

Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.

Over the next 12 months, sell-side analysts expect MACOM's revenue to rise by 49.6%, an improvement versus its 14.2% annualized growth for the past five years. This projection is admirable and suggests its newer products and services will catalyze better top-line performance.

One Reason to Be Careful:

Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, MACOM's margin dropped by 3 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. MACOM's free cash flow margin for the trailing 12 months was 17.5%.

MACOM Trailing 12-Month Free Cash Flow Margin

Final Judgment

MACOM's positive characteristics outweigh the negatives, and with its shares beating the market recently, the stock trades at 36.4× forward P/E (or $308.10 per share). Is now the time to initiate a position? See for yourself in our full research report, it's free.

Story Continues

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