Semtech (SMTC) AI Stock Analysis

• Market Cap: $7.38B
• Dividend Yield: N/A
• Average Volume (3M): 1.87M
• Price to Earnings (P/E): 239.6
• Beta (1Y): 2.08
• Revenue Growth: 20.60%
• EPS Growth: N/A
• Country: US
• Employees: 1,838
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.48
• Shares Outstanding: 92,540,054
• 10 Day Avg. Volume: 1,611,975
• 30 Day Avg. Volume: 1,868,282
• PEG Ratio: 0.34
• Price to Book (P/B): 8.84
• Price to Sales (P/S): 5.27
• P/FCF Ratio: 109.51
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 6.12
• Enterprise Value/Gross Profit: 11.76
• Enterprise Value/Ebitda: 55.88
• 1Y Price Target: $82.87
• Price Target Upside: 13.69% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 1.67
• Revenue Forecast (FY): $1.04B

• Rating: 69 Neutral
• Price Target: $87.00 ▲(19.36% Upside)

Semtech's overall stock score reflects strong technical indicators and positive earnings call highlights, which are offset by high valuation concerns and mixed financial performance. The company's strategic advancements and growth in key segments are promising, but profitability and valuation remain areas of concern.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Semtech's products, especially in data center and LoRa segments, supporting long-term market position.

Capital Structure Optimization

Reducing interest expenses enhances financial flexibility, allowing for reinvestment in growth opportunities and improving long-term financial health.

Strategic Acquisitions

Acquiring new technology strengthens Semtech's product portfolio, potentially boosting competitive advantage and market share in the sensing technology sector.

Negative Factors

Declining IoT Margins

Decreasing margins in the IoT segment could pressure profitability, necessitating operational improvements to sustain long-term earnings growth.

Profitability Challenges

Low profitability limits reinvestment capabilities and shareholder returns, potentially impacting long-term growth and competitive positioning.

Noncore Asset Divestiture

Uncertainty in divesting noncore assets could prolong inefficiencies, affecting operational focus and financial performance over the medium term.

Semtech Business Overview & Revenue Model

Company Description

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms. It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company also offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and wireless and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products used in industrial and consumer applications. In addition, it provides power products consisting of switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging that control, alter, regulate, and condition the power within electronic systems. The company serves original equipment manufacturers and their suppliers in the enterprise computing, communications, and consumer and industrial end-markets. It sells its products directly, as well as through independent sales representative firms and independent distributors in North America, Europe, Asia- Pacific, and internationally. The company was incorporated in 1960 and is headquartered in Camarillo, California.

How the Company Makes Money

Semtech generates revenue primarily through the sale of its semiconductor products, which are used in various applications across multiple industries. Key revenue streams include the sale of integrated circuits for IoT devices, wireless communication systems, and infrastructure solutions. The company also benefits from licensing its LoRa technology to partners, which facilitates the deployment of IoT networks. Significant partnerships with companies in telecommunications, industrial automation, and smart city initiatives further enhance Semtech's revenue potential, as they create demand for its products and expand its market reach.

Semtech Financial Statement Overview

Summary

Semtech's financial performance is mixed. While there is modest revenue growth and improved cash flow, profitability remains a challenge with low net profit margins and past financial instability.

Income Statement

Semtech's income statement shows a mixed performance. The TTM data indicates a modest revenue growth rate of 3.03%, with a gross profit margin of 51.87%. However, the net profit margin is relatively low at 2.39%, suggesting limited profitability. The EBIT and EBITDA margins are also modest, indicating room for improvement in operational efficiency. Historical data shows fluctuating net income, with significant losses in previous years, impacting overall profitability.

Balance Sheet

The balance sheet reflects a moderate financial position. The TTM debt-to-equity ratio is 0.74, indicating a manageable level of leverage compared to previous years. However, the return on equity is low at 4.10%, suggesting limited returns for shareholders. The equity ratio is not directly provided, but the overall asset base appears stable. Historical data shows improvement in equity levels, but past high leverage remains a concern.

Cash Flow

Cash flow analysis reveals a positive trajectory. The TTM free cash flow growth rate is 7.30%, indicating improved cash generation. The operating cash flow to net income ratio is 0.53, suggesting decent cash conversion efficiency. The free cash flow to net income ratio is high at 0.98, reflecting strong cash flow relative to net income. Historical data shows fluctuations, but recent improvements are promising.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	909.29M	868.76M	756.53M	740.86M	595.12M
Gross Profit	456.53M	296.25M	478.56M	466.08M	363.55M
EBITDA	115.07M	-851.10M	126.55M	178.04M	106.55M
Net Income	-161.90M	-1.09B	61.38M	125.66M	59.90M
Balance Sheet
Total Assets	1.42B	1.37B	2.57B	1.13B	1.08B
Cash, Cash Equivalents and Short-Term Investments	164.46M	143.13M	235.51M	279.60M	268.89M
Total Debt	551.50M	1.40B	1.34B	175.65M	179.19M
Total Liabilities	876.84M	1.68B	1.81B	393.14M	383.15M
Stockholders Equity	542.43M	-307.43M	755.85M	737.58M	698.74M
Cash Flow
Free Cash Flow	43.78M	-125.02M	98.39M	176.94M	86.20M
Operating Cash Flow	57.99M	-93.92M	126.71M	203.12M	118.93M
Investing Cash Flow	-11.89M	-22.70M	-1.25B	-40.32M	-42.91M
Financing Cash Flow	-21.66M	10.55M	1.08B	-152.10M	-100.45M

Semtech Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMTC, the sentiment is Positive. The current price of 72.89 is above the 20-day moving average (MA) of 72.06, above the 50-day MA of 70.28, and above the 200-day MA of 50.73, indicating a bullish trend. The MACD of 2.72 indicates Negative momentum. The RSI at 49.94 is Neutral, neither overbought nor oversold. The STOCH value of 63.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMTC.

Semtech Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ONTO	82 Outperform	$8.25B	45.21	8.96%	―	6.38%	-4.15%
CRUS	79 Outperform	$6.43B	17.41	19.12%	―	2.19%	19.22%
SMTC	69 Neutral	$7.38B	239.61	13.39%	―	20.60%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SITM	61 Neutral	$10.06B	―	-7.88%	―	59.04%	28.50%
SLAB	56 Neutral	$4.79B	―	-8.00%	―	47.10%	64.29%
ALGM	52 Neutral	$5.27B	―	-3.02%	―	-7.23%	-15.69%

Semtech Corporate Events

Semtech Reports Record Q3 Sales and Growth

Semtech Corporation reported record net sales of $267.0 million for the third quarter of fiscal year 2026, marking a 13% year-over-year growth. The company achieved improvements in both GAAP and Non-GAAP financial metrics, including gross and operating margins, and reduced its GAAP diluted loss per share from $0.10 to $0.03 compared to the previous year. These results reflect the company’s strategic R&D investments and strong customer partnerships, positioning it to lead in ultra-power-efficient solutions for data center networking, LoRa connectivity, and AI interfaces. The financial performance demonstrates leverage in Semtech’s financial model, with growth in operating and free cash flows and reduced interest costs, which are being reinvested to accelerate growth in its core portfolio.

Semtech Prices $350M Convertible Notes Offering

On October 7, 2025, Semtech Corporation announced the pricing of its $350 million offering of 0% Convertible Senior Notes due 2030, with an option for initial purchasers to buy an additional $52.5 million, bringing the total to $402.5 million. The net proceeds, estimated at $391.2 million, will be used to exchange existing notes, repay term loans, and fund capped call transactions to mitigate stock dilution. The Notes, convertible under specific conditions, are expected to enhance Semtech’s financial flexibility and market positioning, while the capped call transactions aim to reduce potential dilution and cash outflows upon conversion.

Semtech Announces $350M Convertible Notes Offering

On October 6, 2025, Semtech Corporation announced its intention to offer $350 million in 0% convertible senior notes due 2030 in a private placement to qualified institutional buyers. The proceeds from this offering are expected to be used for exchanges of existing convertible notes and to repay a portion of term loans under Semtech’s senior credit facilities. This strategic move is anticipated to influence the market price of Semtech’s common stock and notes, potentially affecting stakeholders’ ability to convert notes and the value of shares received upon conversion.