MACOM (MTSI) acquires linearizers and expands product portfolio


MACOM technology solutions MTSI has acquired Linearizer Communications Group (“LCG”) for $49 million.

LCG is well known for correcting distortion in communication systems and linear optical links. In addition, the company focuses on non-linear microwave predistortion and high-performance photonic microwave solutions.

We note that MACOM’s component and subsystem design capabilities are likely to be enhanced upon completion of the underlined acquisition.

This, in turn, is expected to expand its presence in the end market, particularly in the industrial and defense markets. Additionally, with LCG’s robust solutions, MACOM remains well positioned to deliver solid momentum across terrestrial, avionic and space-based applications.

MACOM Technology Solutions Holdings, Inc. Price and Consensus

MACOM Technology Solutions Holdings, Inc. Price and Consensus

MACOM Technology Solutions Holdings, Inc. Price Consensus Chart | Quote from MACOM Technology Solutions Holdings, Inc

growth prospects

The LCG acquisition aims to expand MACOM’s presence in the booming photonics solutions market.

According to a report by Fortune Business Insights, the global photonics market is expected to reach $1.3 trillion by 2028, at a CAGR of 6.7% between 2021 and 2028.

According to a report by Mordor Intelligence, the market is expected to reach $1.1 trillion by 2027, at a CAGR of 7.5% between 2022 and 2027.

In particular, MACOM’s strong prospects in this promising market due to the highlighted acquisition are likely to support its financial viability in the near future. Also, the prospects should help MTSI gain investor confidence.

In terms of price development, MACOM has gained 20.5% over the past year, outperforming the industry growth of 12.9%.

portfolio strength

The latest move bodes well for the company’s growing efforts to expand its product portfolio.

Apart from LCG, MACOM recently signed a definitive agreement to purchase the assets and operations of OMMIC SAS. In particular, this acquisition is expected to fuel MACOM’s momentum in microwave applications in the telecommunications, industrial, aerospace and defense markets. In addition, it will increase MACOM’s wafer production capacity.

In addition, MTSI’s presence in European markets is expected to be strengthened upon completion of the acquisition.

In addition to strategic acquisitions, MTSI recently unveiled a family of 226 Gbps per lane technology that includes the MATA-40734 and MATA-40736 transimpedance amplifiers, the MAOM-011112 externally modulated laser driver, and a MARP-BP112 photodiode. In particular, the new product family supports the development of 1.6 TB optical modules.

In addition, MTSI continues to bring reliable and efficient technologies to provide customers with better solutions.

We believe the strength of MACOM’s portfolio will continue to help maintain momentum with customers.

Zacks rank and stocks to consider

MACOM currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Arista Networks A NET, Agilent Technologies A and AMETEK A ME. While Arista Networks has a Zacks Rank #1 (Strong Buy), Agilent and AMETEK currently have a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks can be found here.

Arista Networks shares are up 22.7% over the past year. The long-term earnings growth rate for ANET is currently forecast at 14.17%.

Agilent stock is up 4.9% over the past year. A’s long-term earnings growth rate is currently forecast at 12%.

AMETEK shares are up 9.8% over the past year. The long-term earnings growth rate for AME is currently forecast at 8.81%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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