MACOM Technology Solutions (MTSI) surged to $418 at one point in May but fell back to the $250 level two months later. This was not due to a collapse in earnings, but rather a reversal of its skyrocketing valuation. This article examines the gap between the current price and the average analyst target of around $400, and assesses whether accelerated data center growth justifies this premium.
The won was standardized at 1,443 won per dollar (based on the closing price on July 31, 2026), and the financial and stock price data used in the analysis is as of August 3, 2026.
index
- What kind of company is McCom Technology (MTSI)?
- McCom (MTSI) Recent Earnings: FQ2 2026 Report Card and Revenue Trends
- McCombs (MTSI) Valuation: Multiples vs. Growth Rate
- Relative valuation based on competitor comparison
- McCom (MTSI) Target Price Scenarios and Growth Drivers
- Risks and Bearish Triggers
- Stories outside the data
- Investment Opinion Conclusion
- Frequently Asked Questions
I will summarize the conclusion in three sentences.
McCom's 12-month target price is estimated at $315 (approx. 455,000 won) for base, $385 (approx. 556,000 won) for bull, and $205 (approx. 296,000 won) for bear.
The investment recommendation is a 'divided buy' perspective. While the direction is positive as data center revenue is structurally accelerating, the premium of approximately 36x forward P/E and 18x PSR is burdensome without earnings reconfirmation.
The correction of approximately 401 TP3T from the May high is a valuation retracement rather than earnings deterioration, and whether the 601 TP3T data center growth guidance is reaffirmed in the FQ3 2026 earnings scheduled for early August will determine the next direction.
What kind of company is McCom Technology (MTSI)?
McCom is an analog semiconductor company founded in 1950 and headquartered in Lowell, Massachusetts. It designs and supplies semiconductor components for RF (radio frequency), microwave, millimeter wave, and lightwave bands, and has a portfolio of standard and custom products such as integrated circuits, multi-chip modules, diodes, amplifiers, and switches.
Revenue is broadly categorized into three segments. The first is telecommunications infrastructure, which includes long-distance and metro optical networks, 5G and 6G infrastructure, satellite communications, and Post-Optical Networks (PON). The second is the industrial and defense sector, which encompasses military and commercial radar, electronic warfare equipment, and telecommunications data links. The third is data centers, which are the core of recent growth, and demand for components that process optical traffic between AI servers is increasing explosively. The difference from pure AI theme stocks lies in the structure where a high-growth axis—data centers—is layered on top of established cash cows (defense and telecommunications).
McCom (MTSI) Recent Earnings: FQ2 2026 Report Card and Revenue Trends
McCombs' fiscal year ends in late September. The most recently announced revenue for FQ2 2026 (ending March 2026) was $289 million (approximately 417 billion KRW), marking a record quarterly high with an increase of about 221 TP3T from the same period last year. Diluted earnings per share (EPS) on a GAAP basis was $0.60, and the adjusted gross margin remained in the high 501 TP3T range, in line with the company's guidance.
The key point is that revenue has been trending upward for five consecutive quarters. Looking at the trend table below, you can see that data center demand is being reflected in actual figures.
| Quarterly (Accounting) | Sales (million 1 TP 4 T) | Sales (billion won) | Diluted EPS ($) |
|---|---|---|---|
| FQ2 2025 (25.3) | 235.9 | 3,404 | 0.42 |
| FQ3 2025 (25.6) | 252.1 | 3,638 | 0.48 |
| FQ4 2025 (25.9) | 261.2 | 3,769 | 0.59 |
| FQ1 2026 (25.12) | 271.6 | 3,919 | 0.64 |
| FQ2 2026 (26.3) | 289.0 | 4,170 | 0.60 |
The company provided FQ3 2026 revenue guidance of $331 million to $339 million (median approximately 483.4 billion KRW), adjusted EPS of $1.31 to $1.37, and adjusted gross margins of 59 to 601 TP3T. In particular, the highlight of the May earnings announcement was the significant upward revision of the annual growth outlook for the data center segment from the previous 35 to 401 TP3T to over 601 TP3T. However, it is worth noting that for the entire fiscal year 2025 (ending September), the company posted a net loss on a GAAP basis due to a one-time impairment loss of approximately $193 million. Excluding this item, normalization earnings were positive. The same AI semiconductor equipment and component cycle Applied Materials (AMAT) AnalysisBy comparing it to, it is easy to gauge where McCom's sales growth momentum stands.
McCombs (MTSI) Valuation: Multiples vs. Growth Rate
Valuation is the biggest issue regarding this stock. As of the current price of $251.44 (approximately 363,000 won), the key indicators are as follows. Since the lagging P/E is distorted by exceeding 100 times due to the one-time impairment loss explained earlier, one must look at leading indicators for growth stocks.
| characteristic | black eye | reference |
|---|---|---|
| Preceding P/E | About 36 times | Semiconductor premium compared to average |
| trailing P/E | About 107 times | Distortion due to one-time costs |
| PSR(TTM) | About 18 times | Overvalued relative to sales |
| PBR | About 13.5 times | — |
| PEG | Approx. 2.05 | Somewhat burdensome compared to growth |
To summarize using the valuation bridge, the situation is as follows. The current price is calculated by applying a multiple of approximately 36 times to the forward EPS of about $6.93 (approximately 10,000 won). The market is placing a premium on the narrative of 601 TP3 T of data center revenue growth, but the problem is that this multiple exceeds the semiconductor industry average (roughly 25–30 times). In other words, the current stock price already largely reflects the assumption that "high growth in data centers will continue for at least another 1–2 years." While the premium is justified if the growth rate is maintained, the structure is such that the multiple itself could rapidly compress if signs of a slowdown appear in even a single quarter. This point applies to high-valuation semiconductor equipment stocks. Teradyne (TER) AnalysisIt is similar in nature to the 'overvaluation controversy' discussed earlier.
Relative valuation based on competitor comparison
McCom competes with and is compared to various other stocks under the theme of optical communication and AI data center connectivity. From the perspective of a 'connectivity' semiconductor that links data within AI servers and between servers, Astera Labs (ALAB) AnalysisThe nature is similar. However, while Astera is a pure AI connectivity startup, McCom has a stable revenue base in defense and telecommunications, making its downside relatively solid.
If we extend it to the realm of physical interconnects and connectors Amphenol (APH) analysisThis also overlaps with the situation. While all three stocks benefit from the same tailwind of "increased AI data center traffic," there are significant differences in valuation multiples and revenue composition (pure AI exposure). McCom is positioned somewhat like a hybrid, operating in the high-value sector of optical communication chips while having its lower valuation supported by defense revenue.
McCom (MTSI) Target Price Scenarios and Growth Drivers
The growth drivers are clear: the transition of AI data centers to 400G and 800G (and next-generation 1.6T) optical communications, demand for defense radar and electronic warfare, and 5G and 6G infrastructure. Among these, data centers will be the center of gravity for growth over the next two years. Based on this, we present three scenarios for 12-month target share prices.
| scenario | Target Price ($) | Won (approx.) | Compared to the current price | premise |
|---|---|---|---|---|
| Bull | 385 | 556,000 won | Approx. +53% | Data Center 601 TP 3T+ Continues Growth, Exceeds FY2027 EPS |
| Base | 315 | 455,000 won | Approx. +25% | Continued growth but partial normalization of multiples (approx. 45 times) |
| Bear | 205 | 296,000 won | Approx. -18% | Data center slowdown and multiplier compression (approx. 30x) |
For reference, the average target price of 13 Wall Street analysts is approximately $401 (about 578,000 won), with a high of $450 and a low of $300, and the average investment opinion is 'Buy' (1.6). However, it should be noted that a significant number of these targets were set when the stock price was in the $350–$400 range, and the most recent action in July was actually a downward revision (Susquehanna, $350→$300). This is why my baseline target of $315 is more conservative than the consensus.
Risks and Bearish Triggers
The three bearish triggers are organized in the order of 'Factor → Impact → Observed Indicator'.
- Valuation compression → Forward P/E of 36x could quickly drop below 30x if growth slows → Observation: Quarterly revenue QoQ growth rate, data center segment growth rate.
- Data center demand volatility → Orders for optical components plummet if AI capex cycle turns → Observation: Whether hyperscaler capex guidance and data center 60% guidance are maintained.
- Tariff and Supply Chain Risks → Recently, semiconductor stocks, including McCom, have fallen together due to U.S. semiconductor-related tariff issues. → Observation: Changes in trade policy, import conditions for special materials and wafers.
Financial safety nets exist. With debt of approximately $414 million relative to cash of about $665 million, the financial structure is solid, resulting in net cash of approximately $251 million (about 362 billion KRW) and a current ratio of 7.5 times. In other words, the risk for this stock is focused on a 'reversal of high valuations' rather than 'bankruptcy.' The valuation burden of the same AI semiconductor equipment cycle is Lam Research (LRCX) AnalysisThis is a structural topic that has been repeatedly pointed out in [the text] as well.
Stories outside the data
Personally, the most interesting aspect of this stock is the 'discrepancy.' The stock price fell 401 TP3 T in just two months from $418 in May, yet the company's data center guidance was actually raised during that time. The decline was not due to poor earnings, but rather a reversal of a valuation that had risen too quickly. In a phase like this, I believe it is important to separate the focus from the word 'plunge' in news headlines and examine whether the fundamentals have actually been damaged.
Furthermore, rather than blindly trusting the consensus target of approximately $400, it is necessary to develop the habit of verifying when that target was set. The fact that the most recent analyst action was a downgrade could be a signal that the market is re-evaluating this stock with a cool head. If it were me, I would check whether the data center guidance is maintained in the early August earnings report, and if confirmed, I would choose a split approach.
Investment Opinion Conclusion
In summary, McCom is a stock where "the direction is right, but the price is the problem." The quality of the business is high, combining a structural growth axis of data center optical communications with stable downsides in defense and telecommunications. However, with a forward P/E of 36x and a PSR of 18x, which represent a premium significantly exceeding the semiconductor average, the current stock price already largely reflects the expectation of continued high growth.
Therefore, the investment recommendation is 'divided buying.' Rather than buying all at once, we believe a strategy of approaching in installments whenever the stock corrects toward the bearish scenario ($205), while observing whether data center guidance is reaffirmed in the early August earnings report, is reasonable in terms of risk. The key message is to bet on the direction but exercise discipline regarding the entry price.
For more detailed earnings reports McCom IR Page와 SEC EDGAR DisclosureIt can be checked at, and the guidance-related summary is Seeking Alpha MTSI PageIt is worth referring to.
Frequently Asked Questions
What is the one-year target price for McCom (MTSI)?
We estimate the base price at $315 (approximately 455,000 won), the bullish target at $385, and the bearish target at $205. The average target price of 13 Wall Street analysts is approximately $401, but it must be noted that recent action has been downward.
Why has the stock price fallen 401 TP3 T since May?
The main cause is not deteriorating earnings, but a valuation reversal following a surge to $418. During the same period, data center growth guidance was actually raised.
What is the guidance for data center revenue growth?
In its May earnings, the company raised its growth forecast for the data center segment in fiscal year 2026 from the previous 35–401 TP3T to over 601 TP3T. It projected quarterly growth of approximately 351 TP3T for FQ3.
Is the current valuation expensive?
With a forward P/E of approximately 36x and a PSR of approximately 18x, it is in a premium range exceeding the semiconductor industry average. The key question is whether revenue growth of +221 TP3T and data center growth of +601 TP3T can justify these multiples.
When is the next earnings announcement?
The earnings announcement for the third fiscal year (FQ3 2026) is scheduled for early August 2026. Whether the data center growth guidance is maintained at this event will be a key variable for the direction of the stock price next.
※ This analysis was prepared based on publicly available data with the assistance of AI research tools, and the author personally reviewed the figures and logic prior to publication. It is for informational purposes only and does not constitute investment advice. Stock prices, exchange rates, and earnings estimates are based on the time of writing and are subject to change; investment decisions and the responsibility thereof rest solely with the investor.