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Semtech
(NASDAQ:SMTC)
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Rating:65Neutral
Price Target:
$172.00
▲(34.88% Upside)
Action:Reiterated
Date:10/16/26
SMTC scores as moderately attractive primarily due to improving financial performance (profitability and strong free cash flow) and a notably bullish earnings outlook with accelerating data center/LoRa growth and expanding margins. Offsetting factors are a rich valuation (very high P/E) and mixed near-term technicals (below the 20-day average with weaker momentum), plus ongoing execution/capacity risks highlighted by management.
Positive Factors
Data Center and LoRa Growth
Semtech is targeting sustained expansion in two strategic platforms, with data center and LoRa identified as the primary growth engines. If execution continues, this mix can increase recurring demand for connectivity products, broaden platform relevance, and support stronger operating leverage over the next several quarters.
Negative Factors
Capacity Expansion Risk
Demand is growing faster than currently secured manufacturing capacity, creating a risk that Semtech may not convert its opportunity into revenue on schedule. Additional commitments, prepayments, and equipment spending could also raise execution complexity and pressure cash deployment during expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Data Center and LoRa Growth
Semtech is targeting sustained expansion in two strategic platforms, with data center and LoRa identified as the primary growth engines. If execution continues, this mix can increase recurring demand for connectivity products, broaden platform relevance, and support stronger operating leverage over the next several quarters.
Read all positive factors
Semtech (SMTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.47B
Dividend YieldN/A
Average Volume (3M)3.64M
Price to Earnings (P/E)87.1
Beta (1Y)2.35
Revenue Growth17.84%
EPS Growth464.80%
CountryUS
Employees1,920
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.66
Shares Outstanding93,325,620
10 Day Avg. Volume3,985,021
30 Day Avg. Volume3,643,721
Financial Highlights & Ratios
PEG Ratio2.22
Price to Book (P/B)13.05
Price to Sales (P/S)6.83
P/FCF Ratio44.92
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue11.09
Enterprise Value/Gross Profit21.30
Enterprise Value/Ebitda98.50
Forecast
1Y Price Target
$217.93Price Target Upside70.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)3.63
Revenue Forecast (FY)$1.50B
Semtech Business Overview & Revenue Model
Company Description
Semtech Corporation is a technology firm specializing in the creation, production, and global distribution of advanced analog and mixed-signal semiconductor components, complemented by sophisticated algorithms. The company's extensive product port...
How the Company Makes Money
Semtech makes money primarily by selling semiconductor products and related connectivity solutions to electronics manufacturers and system providers. Its revenue is largely generated from (1) the sale of integrated circuits and components used for...
Semtech Earnings Call Summary
Earnings Call Date:Aug 25, 2026
(Q2-2027)
| Next Earnings Date:Dec 02, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive performance and outlook: sizable revenue and EPS beats, significant margin expansion (structural improvement after the planned divestiture), record data center and LoRa growth, robust cash generation and confident forward guidance. Key risks are largely execution and capacity-related (scaling photonics fabs, tester/back-end capacity and ensuring qualification timing with hyperscalers), plus near-term consumer softness and comparability effects from the module divestiture. On balance, the upbeat results, high-growth guidance and structural margin improvement outweigh the operational and scaling risks.Positive Updates
Record Revenue and Top-Line Growth
Revenue of $342 million in Q2, up 33% year-over-year and 17% sequentially; 10th consecutive quarter of net sales growth and above the high end of the outlook range.
Negative Updates
Capacity Constraints and Near-Term Supply Risk
Management expects current secured capacity may be insufficient for FY2028 (especially H2 FY2028) and is actively securing additional front-end wafer and back-end OSAT/tester capacity; may require prepayments, CapEx or partner commitments to expand allocation.
Read all updates
Q2-2027 Updates
Positive
Negative
Record Revenue and Top-Line Growth
Revenue of $342 million in Q2, up 33% year-over-year and 17% sequentially; 10th consecutive quarter of net sales growth and above the high end of the outlook range.
Read all positive updates
Company Guidance
Semtech guided Q3 fiscal 2027 net sales of $410 million ± $5 million (≈ +20% sequential, +54% year‑over‑year at the midpoint), driven by data center revenue (projected +45% sequential, ~+160% YoY), LoRa (about +15% sequential, ~+65% YoY) and consumer/industrial growth; they expect adjusted gross margin of 58.3% ±100 bps (ex‑cellular‑module: 63.9% at midpoint), adjusted net operating expenses of $112 million ± $3 million, adjusted operating margin of 31% at the midpoint (+660 bps sequential, +1,040 bps YoY), adjusted EBITDA of $134 million ± $4 million (32.8% margin, +620 bps sequential, +930 bps YoY), adjusted diluted EPS of $1.05 ± $0.03 (+48% sequential, +119% YoY) on ~99 million weighted average shares, adjusted interest & other net of ≈$0.5 million and an adjusted normalized tax rate of 18%; management said the cellular module divestiture is expected to close in Q4 and be non‑GAAP EPS neutral, CapEx should remain generally below 5% of sales (Q2 was 2%), and they are securing incremental capacity for FY2028 with CW lasers expected to begin contributing in H1 FY2028.Semtech Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
63
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.17B | 1.05B | 909.29M | 868.76M | 756.53M | 740.86M |
| Gross Profit | 611.12M | 541.60M | 455.64M | 373.99M | 478.96M | 461.14M |
| EBITDA | 132.17M | 65.73M | -44.91M | -851.06M | 131.07M | 182.53M |
| Net Income | 153.94M | -40.40M | -161.90M | -1.09B | 61.38M | 125.66M |
Balance Sheet | ||||||
| Total Assets | 1.65B | 1.41B | 1.42B | 1.37B | 2.57B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 204.05M | 195.18M | 164.46M | 143.13M | 235.51M | 279.60M |
| Total Debt | 524.99M | 497.30M | 557.53M | 1.38B | 1.35B | 175.65M |
| Total Liabilities | 898.17M | 860.62M | 876.84M | 1.68B | 1.81B | 393.14M |
| Stockholders Equity | 748.87M | 549.72M | 542.43M | -307.43M | 755.85M | 737.58M |
Cash Flow | ||||||
| Free Cash Flow | 181.46M | 159.73M | 43.78M | -125.02M | 98.39M | 176.94M |
| Operating Cash Flow | 202.37M | 169.51M | 57.99M | -93.92M | 126.71M | 203.12M |
| Investing Cash Flow | -86.37M | -38.76M | -11.89M | -22.70M | -1.25B | -40.32M |
| Financing Cash Flow | -80.76M | -89.42M | -21.66M | 10.55M | 1.08B | -152.10M |
Semtech Technical Analysis
Neutral
127.52
Price Trends
156.56
Negative
148.70
Negative
124.08
Positive
Market Momentum
-8.71
Positive
44.45
Neutral
38.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMTC, the sentiment is Neutral. The current price of 127.52 is below the 20-day moving average (MA) of 162.95, below the 50-day MA of 156.56, and above the 200-day MA of 124.08, indicating a neutral trend. The MACD of -8.71 indicates Positive momentum. The RSI at 44.45 is Neutral, neither overbought nor oversold. The STOCH value of 38.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SMTC.
Semtech Risk Analysis
Semtech disclosed 62 risk factors in its most recent earnings report. Semtech reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Semtech Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $31.47B | 56.76 | 27.16% | ― | 165.11% | 301.97% | |
72 Outperform | $19.53B | 79.90 | 17.09% | ― | 28.36% | ― | |
65 Neutral | $13.47B | 87.09 | 25.26% | ― | 17.84% | 464.80% | |
65 Neutral | $7.40B | -187.69 | -3.59% | ― | 21.71% | 63.22% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
50 Neutral | $6.79B | -213.34 | -6.11% | ― | 56.02% | 83.39% |
* Technology Sector Average
SMTC
Semtech
146.97
77.41
111.29%
MTSI
MACOM Technology Solutions Holdings
260.92
108.26
70.92%
MXL
Maxlinear
75.14
59.93
394.02%
SLAB
Silicon Laboratories
221.76
89.43
67.58%
CRDO
Credo Technology Group Holding Ltd
173.69
2.17
1.27%
Semtech Corporate Events
Business Operations and StrategyFinancial Disclosures
Semtech Boosts Outlook at Data Center Analyst Day
Positive
Oct 15, 2026
On October 15, 2026, Semtech held a Data Center Analyst Day where it raised its outlook for the third quarter of fiscal 2027, projecting net sales of about $417.5 million and higher adjusted margins and earnings per share. The company also outline...
Business Operations and StrategyFinancial Disclosures
Semtech Reports Record Q2 Fiscal 2027 Results
Positive
Aug 25, 2026
On August 25, 2026, Semtech reported unaudited results for the second quarter of fiscal 2027, ended July 26, 2026, posting record net sales of $341.9 million, up 17% sequentially and 33% year over year, with a GAAP gross margin of 53.8% and operat...
Business Operations and StrategyM&A Transactions
Semtech to Divest Cellular Module Business to Compal
Positive
Aug 13, 2026
On August 13, 2026, Semtech Corporation announced it had signed a definitive agreement to sell its cellular module business to Taiwan-based Compal Electronics, Inc. for $62 million in cash, pending customary adjustments and regulatory approvals. T...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.