While MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) might not have the largest market cap around , it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The company is now trading at yearly-high levels following the recent surge in its share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine MACOM Technology Solutions Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for MACOM Technology Solutions Holdings

Is MACOM Technology Solutions Holdings Still Cheap?

MACOM Technology Solutions Holdings appears to be overvalued by 25% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$135 on the market compared to our intrinsic value of $107.98. This means that the opportunity to buy MACOM Technology Solutions Holdings at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that MACOM Technology Solutions Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of MACOM Technology Solutions Holdings look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. MACOM Technology Solutions Holdings' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in MTSI’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MTSI should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.