M/A-Com (MTSI) Soars 8.3%: Is Further Upside Left in the Stock?

M/A-Com (MTSI) shares ended the last trading session 8.3% higher at $49.68. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.9% loss over the past four weeks.

MACOM extended its rally, driven by solid momentum in telecommunication market. Strong 5G network deployments, rising demand for its RF and microwave products and strength across defense applications are continuously driving the top-line growth. Further, the company’s traction in the data center market remains a positive. Growing proliferation of cloud services is benefiting both domestic and international deployments of the company. All these factors are helping MACOM in winning investors’ confidence.

This chipmaker is expected to post quarterly earnings of $0.70 per share in its upcoming report, which represents a year-over-year change of +22.8%. Revenues are expected to be $170.03 million, up 11.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For M/A-Com, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MTSI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

M/A-Com is part of the Zacks Semiconductor - Analog and Mixed industry. Microchip Technology (MCHP), another stock in the same industry, closed the last trading session 4.6% higher at $60.58. MCHP has returned -17.3% in the past month.

Microchip Tech's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.34. Compared to the company's year-ago EPS, this represents a change of +35.4%. Microchip Tech currently boasts a Zacks Rank of #3 (Hold).

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