Network chips maker MACOM Technology Solutions (NASDAQ: MTSI) will be reporting results tomorrow before market hours. Here's what to expect.
Last quarter MACOM reported revenues of $148.5 million, down 13.8% year on year, in line with analyst expectations. It was a weaker quarter for the company, with a decline in its operating margin and an increase in its inventory levels.
Is MACOM buy or sell heading into the earnings? Read our full analysis here.
This quarter analysts are expecting MACOM's revenue to decline 15.6% year on year to $150.3 million, a deceleration on the 14.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.55 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 0.7%.
Looking at MACOM's peers in the analog semiconductors segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Skyworks Solutions's revenues decreased 13.4% year on year, beating analyst estimates by 0.3% and Magnachip reported revenue decline of 14% year on year, missing analyst estimates by 1%. Skyworks Solutions traded down 7% on the results, Magnachip traded flat after the results.
The fears around raising interest rates have been putting pressure on tech stocks and while some of the analog semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 6% over the last month. MACOM is down 10.6% during the same time, and is heading into the earnings with analyst price target of $86.1, compared to share price of $73.9.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
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The author has no position in any of the stocks mentioned.