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Applied Micro Hits 52-Week High, to Be Acquired by MACOM


Share price of Applied Micro Circuits Corporation AMCC rallied to a new 52-week high of $8.25, eventually closing a tad bit lower at $8.10 on Nov 21. This represents a strong one year return of 27.16%, better than the S&P 500’s 7.5% over the same period.

Currently, Applied Micro holds a Zacks Rank #2 (Buy). Notably, the stock has a market cap of $626 million.

Most recently, MACOM Technology Solutions MTSI announced that it is set to buy Applied Micro for almost $770 million, which will help it to foray into the growing cloud market.

APPLD MICRO CIR Price and Consensus

APPLD MICRO CIR Price and Consensus | APPLD MICRO CIR Quote

Key Factors

Applied Micro is a global leader in network and embedded PowerPC processing, optical transport and storage solutions. The company reported better-than-expected second-quarter fiscal 2017 results wherein the bottom line beat the Zacks Consensus Estimate. Moreover, management provided strong revenue guidance for the third-quarter fiscal 2017.

MACOM will pay approximately $8.36 per share, consisting of $3.25 in cash and 0.1089 MACOM shares per share of AppliedMicro. The price represented a 15.4% premium over the company’s closing price of $7.25 on Nov 18.

Moreover, MACOM will sell off Applied Micro’s business of manufacturing computer chips after the acquisition process gets completed (within the first 100 days of closing).

Estimate Revisions

The Zacks Consensus Estimate for the current year has narrowed down to a loss of 29 cents from a loss of 39 cents over the last 30 days as most of the analysts revised their figures upward. Also, for fiscal 2018, estimates have surged 35.7% to a loss of 9 cents per share over the same time frame, as most of the analysts revised their estimates upward.

Key Sector Picks

Some better-ranked stock in the broader technology space are Applied Optoelectronics, Inc. AAOI and Acacia Communications, Inc. ACIA, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the consensus estimate for Applied Optoelectronics’ current year improved to 81 cents from 51 cents over the last 30 days.

The consensus estimate for Acacia’s current year improved to $2.33 from $2.31 over the last seven days.

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