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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Macom Technology Solutions Holdings, Inc. (XNAS:MTSI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MTSI
Name:
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. (XNAS:MTSI)
Sector:
29.01M
Industry:
Semiconductors
CEO:
Mr. Stephen Daly
Total Employees:
1,100
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -137.86% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.(MTSI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
53.61
One Month Price Target:
$54.21
Six Month Price Target :
$57.23
Likely Price in One Year's Time:
Ticker:
$60.84
Likely Trading Range Today Under (Normal Volatility)
$53.39
Price Upper limit ($) :
$54.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$49.98
This week:
$45.5
This month :
$37.38
Other Primary facts
Market Cap:
3.72B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
70.00M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.63%
-14.24%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$70.43
$62.58
$36.79
$44.64
Medium risk (<10%) entry points
Buy Call
Sell Call
$60.03
Buy Put:
Sell Put:
$58.36
$47.17
$48.86
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MTSI
Sharpe Ratio:
4.60%
Comparison:
MTSI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 48.65% higher than the industry
& ratio is 101.94% higher than the market/S&P 500 average
Average Returns/Yield of
MTSI
Daily returns:
0.16%
Weekly returns:
0.82%
Monthly returns:
3.28%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is 23.39% above industry average
Classification:
MTSI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
MTSI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.38%
Weekly Volatility:
7.55%
Monthly Volatility:
15.10%
Yearly Volatility:
52.30%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.65%
Volatility in last five trading days has been -21.62% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.77%
Weekly VaR:
-15.14%
Monthly VaR:
-30.27%
How Much Can the price of
MTSI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$40.27
This translates to price declining to:
$8.04
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MTSI is a 113.66% riskier investment compared to the market/S&P 500 & is 83.05% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.87% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MTSI
Beta in relation to market/S&P 500--2.01
Expected beta in 1 year's time:
1.042
Expected beta in 3 year's time:
1.474
Unlevered (debt free) Beta:
0.948
Beta in relation to Nasdaq (XNAS):
0.927
Beta in relation to all global stocks::
0.979
Beta Comparison & Analysis
Beta of competitors/peers::
1.512
Beta is 32.76% higher than peers
Average Industry Beta:
1.41
Beta is 42.30% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
40.07%
Sustainable growth rate is 44.91% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.225
Alpha is 17.69% above industry average alpha yield
Alpha is 1434% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MTSI
Equity cost of capital:
0.169
Equity cost of capital is 31.90% above industry mean WACC
Unlevered (without debt) cost of capital:
7.98%
Before-tax cost of debt:
2.34%
After-tax cost of debt:
1.85%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.85%
WACC is -6.83% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.04
Revenue growth rate per share of (3Y):
7.15
Annual revenue growth rate is -97.83% below industry average
EPS:
$2.82
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$2.09
-
-
Debt per share
$8.60
EBITDA per share
$4.05
Valuation Analysis Today of
MTSI
P/E Ratio:
17.49
P/E Ratio of Competitors/Peers:
28.25
P/E ratio is -38.08% lower than main peers & is -57.82% lower than the industry
Stock price/value with industry average P/E ratio: $116.96
MTSI is -54.17% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.93
Price to sales ratio is -27.02% below the industry mean
P/B (Price to book value ratio):
7.15
Price to free cash flow: 25.62
-
Net income growth rate (3Y):
-125.66%
Net income growth rate is 119.37% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
114.65%
Net debt to equity ratio:
62.73%
Debt to assets ratio:
47.75%
Net debt to assets ratio:
26.12%
Debt-to-asset ratio is 22.48% above industry average
Ability to repay debt:
Interest coverage ratio:
20.1
Interest coverage ratio is -38.70% less than industry average
Looking forward:
Debt growth rate:
-18.48%
Annual debt growth is -120% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.496
Statistical significance of correlation:
MTSI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is -20.95% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
-0.046
Covariance of price movement with the market:
-0.091
Kurtosis
4.401
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.373
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MTSI
Gross Profit Margin Ratio:
234%
Operating Profit Margin Ratio:
17.32%
Operating profit margin is -26.37% lower than the industry
Net Profit Margin Ratio:
234%
Effective Tax Rate:
2.50%
Effective tax rate is -83.47% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
38.21%
Return on equity (ROE) is 33.62% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
15.91%
Return on assets (ROA) is 20.89% higher than the industry
Financial Leverage:
1.9x
Current Ratio:
6.91
Current ratio is 70.14% above industry average
Cash Conversion Cycle (days):
40.7
Cash conversion cycle is -26.22% below industry average
The remaining useful life of property plant & equipment is: 3.1 years
Stock based compensation to net income ratio:
4.96%
In-depth Efficiency Analysis
Revenue generated per employee:
575.1K
Each employee generates -7% less revenue than industry average revenue per employee
EBITDA generated per employee:
257.4K
Each employee generates 10% more EBITDA than industry average revenue per employee
Profit generated per employee:
182.3K
Each employee generates 13% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
26.4K
Each employee generates -5% less free cash flow than industry average revenue per employee
Assets/Capital per employee
535.0K
Each employee generates -5% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -1.76%
Growth rate in R&D investment/expenditure is -112.44% lower than the industry
Competitors/Peer firms of
MTSI
CIRRUS LOGIC, INC. (XNAS:CRUS)
DIGITAL TURBINE, INC. (XNAS:APPS)
CDK GLOBAL, INC. (XNAS:CDK)
SITIME CORPORATION (XNAS:SITM)
STONECO LTD. (XNAS:STNE)
POWER INTEGRATIONS, INC. (XNAS:POWI)
SEMTECH CORPORATION (XNAS:SMTC)
NCINO, INC. (XNAS:NCNO)
CRICUT, INC. (XNAS:CRCT)
Current Analyst Ratings
Strong buy�4%
Buy�21%
Hold�17%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
632.60M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
261.99M
370.61M
138.21M
-
122.80M
-
-
261.02M
-
14.09M
63.42M
283.16M
109.60M
200.52M
205.65M
5.13M
200.52M
Statement of Cash Flow
Date:
Period:
15.23M
Differed Income Tax :
662.00K
Stock Based Compensation :
9.95M
Change in Working Capital :
- 16287.00K
Accounts Receivables:
- 12875.00K
Other Working Capital:
599.00K
Other Non-Cash Items:
- 114281.00K
Net Cash Provided by Operating Activities:
34.10M
Investments in PP&E:
- 5095.00K
Net Acquisitions:
-
Purchases of Investments:
- 75437.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
273.40M
204.31M
477.71M
97.44M
88.54M
7.87M
671.56M
120.77M
313.90M
75.40M
2.50M
38.88M
37.10M
588.55M
-
1.26B
33.94M
921.00K
-
-
62.33M
97.19M
601.66M
36.50M
638.15M
-
735.34M
70.00K
- 655414.00K
3.2M
1.19B
December 31, 2021 at 12:00:00 AM
523.01M
524.77M
1.26B
206.81M
602.58M
329.2M
186.25M
19.00K
105.74M
- 279.00K
-
- 27756.00K
-
5.14M
- 22900.00K
- 82.00K
116.86M
273.40M
156.54M
34.10M
- 5095.00K
29.01M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MTSI
2023
2024
2025
2026
2027
$70.28
$79.76
$90.51
$102.72
$116.57