What happened

Shares of Lowell, Massachusetts-based semiconductor company MACOM Technology Solutions Holdings (NASDAQ:MTSI) were up a respectable 12.5% as of 3:42 p.m. EDT Wednesday. You can thank the friendly analysts at Piper Jaffray for that.

This morning, Piper upgraded  MACOM stock from neutral to overweight on the belief that the stock's 36% price decline over the past year presents investors with a long-term opportunity.

Tumbling dice read buy and sell.

Image source: Getty Images.

So what

MACOM's sales declined 15% and it earned no profit in its fiscal second quarter, which it reported on two months ago. Piper, however, is hoping that MACOM's new management team will produce a recovery by focusing on cutting costs, maximizing cash flow, and exploiting the opportunity presented by the emergence of 5G technology.

Now what

Will all of that be enough, though, to right the ship, and turn this tech component supplier from a sell into a buy?

I can't help but notice that MACOM is going on its third straight year of bottom-line loses right now, which certainly isn't a great situation. However, free cash flow did turn positive again in its fiscal Q2, and as a result, here at the year's halfway mark MACOM is generating positive cash profits -- $4.2 million year to date, according to S&P Global Market Intelligence.

Still, even run-rating that out to predict, say, $8.4 million in positive FCF for the year, this leaves MACOM stock selling for a triple-digit price-to-FCF ratio -- while analysts are still forecasting no better than 15% long-term earnings growth for the stock.

Will all due respect to Piper Jaffray, I don't see a whole lot to be optimistic about in numbers like these.