On Friday, Stifel confirmed its Buy rating on shares of MACOM Technology Solutions (NASDAQ:MTSI), maintaining a $115.00 price target. The endorsement follows a revision of the firm's financial model due to an error discovered in the share count estimates for the calendar years 2024 and 2025.
The corrected model now accounts for a fully diluted share count of 74.0 million for CY24E, up from the previously estimated 72.0 million. This adjustment has led to a revised non-GAAP EPS forecast, decreasing from $2.69 to $2.61 for CY24E. Similarly, for CY25E, the fully diluted share count has been updated from 54.3 million to 75.4 million, resulting in a non-GAAP EPS forecast decrease from $4.76 to $3.43.
Stifel's updated non-GAAP EPS estimates are now more closely aligned with the consensus estimates, which stand at $2.74 and $3.49 for CY24E and CY25E, respectively. The firm emphasized that these changes only affect the annual estimates and not the quarterly or FY24E and FY25E estimates.
The investment firm's valuation of MACOM Technology Solutions remains grounded on an enterprise value to sales (EV/S) multiple of 9.6x, applied to the CY25E sales estimate of $878.8 million. This approach underpins the reaffirmed 12-month target price of $115 for the company's stock.
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