Is MACOM Technology Solutions Holdings, Inc. overvalued or undervalued?

As of 6 February 2025, the valuation grade for MACOM Technology Solutions Holdings, Inc. has moved from expensive to risky. The company is currently considered overvalued. Key ratios highlight this concern, with a P/E ratio of 80, an EV to EBITDA of 52.44, and a Price to Book Value of 7.74.
In comparison to its peers, MACOM's P/E ratio of 80 significantly exceeds that of First Solar, Inc. at 12.18 and Skyworks Solutions, Inc. at 19.16, indicating a substantial premium. Additionally, MACOM's EV to EBITDA ratio of 52.44 is much higher than the industry average, further supporting the overvaluation assessment. Despite a strong return performance against the S&P 500 over various periods, the current valuation metrics suggest that investors may be paying too much for the stock relative to its earnings potential.