Lattice Semiconductor (LSCC) AI Stock Analysis

• Market Cap: $6.58B
• Dividend Yield: N/A
• Average Volume (3M): 2.59M
• Price to Earnings (P/E): 128.8
• Beta (1Y): 2.02
• Revenue Growth: -29.54%
• EPS Growth: -76.42%
• Country: US
• Employees: 1,110
• Sector: Technology
• Sector Strength: 78
• Industry: Semiconductors
• EPS (TTM): 0.22
• Shares Outstanding: 137,507,540
• 10 Day Avg. Volume: 2,113,653
• 30 Day Avg. Volume: 2,591,568
• PEG Ratio: 0.58
• Price to Book (P/B): 18.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 41.35
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 4.07
• Enterprise Value/Gross Profit: 28.14
• Enterprise Value/Ebitda: 18.30
• 1Y Price Target: $63.09
• Price Target Upside: 31.85% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 71 Outperform
• Price Target: $53.00 ▲(10.76%Upside)

Lattice Semiconductor's overall stock score is driven by its solid financial performance and effective management highlighted in the earnings call. However, its high valuation and mixed technical indicators weigh on its attractiveness. The company faces revenue challenges and macroeconomic uncertainties, which are partially offset by strong cash flow and operational efficiency.

Positive Factors

Customer Demand

Customer activity remained strong with a record pace of design wins in sectors like AI datacenters, industrial robotics, and automotive ADAS.

Financial Performance

Free cash flow improved significantly to $23.3M, or 19.4% of revenue, signaling strong financial management and operational efficiency.

Server and AI Growth

Server benefited from expanding content in general-purpose and AI-optimized servers.

Negative Factors

Inventory Challenges

Inventory digestion remains a drag for the business, with the channel clean-up now likely pushed out beyond previous expectations.

Market Softness

Softness in robotics and factory automation persists, and inventory digestion is a drag for the business, with undershipping demand expected to clean up the channel later than anticipated.

Valuation Concerns

Valuation remains high at ~35-40x CY26E EPS, above high-growth compute peers at 17x-35x and high-margin diversified peers at 11x-25x.

Lattice Semiconductor Business Overview & Revenue Model

Company Description

Lattice Semiconductor Corporation, together with its subsidiaries, develops and sells semiconductor products in Asia, Europe, and the Americas. The company offers field programmable gate arrays that consist of four product families, including the Certus-NX and ECP, Mach, iCE40, and CrossLink. It also provides video connectivity application specific standard products. In addition, the company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. It sells its products directly to end customers, and indirectly through a network of independent manufacturers' representatives and independent distributors. The company primarily serves original equipment manufacturers in the communications and computing, consumer, and industrial and automotive end markets. Lattice Semiconductor Corporation was incorporated in 1983 and is headquartered in Hillsboro, Oregon.

How the Company Makes Money

Lattice Semiconductor makes money primarily through the sale of its FPGA products and associated software solutions. The company's revenue model is centered around licensing and selling its semiconductor chips, which are used in various electronic devices and systems across multiple sectors. Lattice also generates income from providing software tools and intellectual property that enable customers to design and deploy their own custom solutions using Lattice's FPGA technology. Additionally, the company benefits from strategic partnerships and collaborations with major technology firms, which help to expand its market reach and enhance its product offerings. Lattice's focus on low power, high performance solutions allows it to cater to the growing demand for efficient and scalable computing in emerging technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT).

Lattice Semiconductor Financial Statement Overview

Summary

Lattice Semiconductor shows strong financial health with robust cash flow management and a stable balance sheet. A high operating cash flow to net income ratio and low debt-to-equity ratio underscore its financial resilience. However, revenue challenges due to market conditions slightly temper the overall financial outlook.

Income Statement

Lattice Semiconductor demonstrates strong profitability with a gross profit margin of 64.8% and an impressive net profit margin of 10.5% TTM (Trailing-Twelve-Months). Despite a revenue decline of 4.1% from the previous year, the company maintains solid EBIT and EBITDA margins of 5.6% and 13.7% respectively, indicating efficient operational management. However, the decrease in revenue suggests potential market challenges.

Balance Sheet

The company's balance sheet is robust, with a low debt-to-equity ratio of 0.02, reflecting minimal leverage and financial risk. A strong equity ratio of 85.9% TTM highlights financial stability and substantial shareholder equity. The return on equity (ROE) stands at an impressive 7.3%, showcasing efficient use of equity to generate profits and a healthy growth potential.

Cash Flow

Lattice Semiconductor exhibits excellent cash flow management, with a free cash flow growth rate of 11.7% and a high operating cash flow to net income ratio of 2.8 TTM, indicating strong cash generation capabilities. The company effectively converts earnings into cash, enhancing its liquidity and financial flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
488.74M	509.40M	737.15M	660.36M	515.33M	408.12M
	Gross Profit
316.66M	340.40M	514.67M	452.05M	321.68M	245.31M
	EBIT
27.44M	34.46M	214.18M	187.37M	100.82M	52.37M
	EBITDA
66.92M	106.94M	255.37M	222.09M	131.38M	83.26M
	Net Income Common Stockholders
51.36M	61.13M	259.06M	178.88M	95.92M	47.39M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
127.56M	136.29M	128.32M	145.72M	131.57M	182.33M
	Total Assets
823.65M	843.90M	840.89M	798.71M	726.49M	680.07M
	Total Debt
16.23M	15.25M	16.31M	148.82M	177.18M	189.60M
	Net Debt
-111.34M	-121.04M	-112.01M	3.10M	45.61M	7.27M
	Total Liabilities
115.74M	132.97M	148.87M	311.55M	314.86M	295.64M
	Stockholders Equity
707.91M	710.93M	692.02M	487.16M	411.63M	384.43M
Cash Flow		Free Cash Flow
133.90M	119.89M	236.34M	215.47M	157.89M	79.57M
	Operating Cash Flow
143.26M	140.88M	269.59M	238.81M	167.72M	91.69M
	Investing Cash Flow
-42.02M	-37.69M	-33.25M	-34.93M	-89.80M	-20.87M
	Financing Cash Flow
-81.06M	-94.46M	-253.72M	-188.07M	-128.61M	-8.10M

Lattice Semiconductor Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 47.85
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LSCC, the sentiment is Negative. The current price of 47.85 is below the 20-day moving average (MA) of 48.14, above the 50-day MA of 47.28, and below the 200-day MA of 53.53, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 47.36 is Neutral, neither overbought nor oversold. The STOCH value of 68.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LSCC.

Lattice Semiconductor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMBS	83 Outperform	$6.24B	30.42	19.26%	―	30.13%	-42.27%
NVMI	80 Outperform	$6.53B	33.73	23.87%	―	41.03%	51.42%
OLED	79 Outperform	$7.30B	31.92	14.58%	1.17%	6.13%	4.70%
QRVO	72 Outperform	$7.39B	135.05	1.60%	―	-1.34%	―
LSCC	71 Outperform	$6.58B	128.80	7.39%	―	-29.54%	-76.42%
SLAB	66 Neutral	$4.49B	―	-14.77%	―	2.16%	-55.38%
Sector *	62 Neutral	$11.80B	10.08	-7.46%	2.99%	7.37%	-8.21%

Lattice Semiconductor Corporate Events

Lattice Semiconductor Announces New Leadership Appointments

On February 10, 2025, Lattice Semiconductor announced key leadership changes with the appointment of Lorenzo A. Flores as Senior Vice President and Chief Financial Officer, and Tonya Stevens as Corporate Vice President and Chief Accounting Officer. The company also reported its fourth quarter and full year 2024 financial results, showing a GAAP revenue of $117.4 million for Q4 and $509.4 million for the year, with significant achievements in operational efficiency and strategic product development. Key highlights included record design wins, the expansion of the Avant and Nexus product lines, and the extension of a stock repurchase program. The company’s strategic realignment and product roadmap enhancements signal confidence in future growth and market opportunities.