Shares of semiconductor company Semtech Corp. (NASDAQ:SMTC) are on the rise today after it delivered better-than-anticipated second-quarter numbers. Revenue rose 13.9% year-over-year to $238.4 million, narrowly outperforming estimates by ~$1 million. On the other hand, EPS of $0.11 outpaced expectations by a wide margin of $0.09.
The increase in the company’s top line was driven by a 114% sequential growth in cloud data center net sales and a 58% sequential growth in high-end consumer net sales in Q2.
The company’s focus on cost-saving initiatives seems to be paying off. However, it remains cautious amid broader economic challenges and high channel inventory levels. As a result, Semtech expects net sales in the third quarter to be in the range of $190 million to $210 million.
Furthermore, investors were surprised after Semtech guided for an adjusted net loss per share in the range of $0.22 to $0.09 for the third quarter. In comparison, in the year-ago period, the company had posted an EPS of $0.65, exceeding estimates by $0.02.
Overall, the Street has a consensus price target of $35.40 on Semtech, alongside a Strong Buy consensus rating. This points to a hefty 54.8% potential upside in the stock.
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