What Happened:
Shares of network chips maker MACOM Technology Solutions (NASDAQ: MTSI) fell 5.2% in the pre-market session after the company reported second-quarter results that narrowly beat analysts' revenue, operating income, and earnings per share (EPS) expectations. However, free cash flow missed, and inventory levels increased. In addition, revenue and EPS guidance for the next quarter were below Consensus estimates and management noted that "the second half is expected to be more challenging." It was a mixed but overall negative quarter given the outlook.
What is the market telling us:
MACOM's shares are somewhat volatile and over the last year have had 14 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
MACOM is down 13.9% since the beginning of the year, and at $53.17 per share it is trading 26.5% below its 52-week high of $72.37 from March 2023. Investors who bought $1,000 worth of MACOM's shares 5 years ago would now be looking at an investment worth $2,470.
Is now the time to buy MACOM? Access our full analysis of the earnings results here, it's free.