Semtech (SMTC) AI Stock Analysis

• Market Cap: $4.21B
• Dividend Yield: N/A
• Average Volume (3M): 1.73M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.02
• Revenue Growth: 13.83%
• EPS Growth: 88.14%
• Country: US
• Employees: 1,838
• Sector: Technology
• Sector Strength: 87
• Industry: Semiconductors
• EPS (TTM): 0.38
• Shares Outstanding: 86,635,590
• 10 Day Avg. Volume: 1,498,534
• 30 Day Avg. Volume: 1,728,497
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.73
• Enterprise Value/Revenue: 3.24
• Enterprise Value/Gross Profit: 6.33
• Enterprise Value/Ebitda: -119.87
• 1Y Price Target: $58.89
• Price Target Upside: 19.23% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 57 Neutral
• Price Target: $52.00 ▲(5.28% Upside)

Semtech's overall stock score reflects a mix of financial challenges and positive growth prospects. The most significant factor is the company's financial performance, which shows areas of concern but also potential for recovery. Technical analysis suggests some bullish momentum, while the earnings call provides a positive outlook. However, valuation concerns due to negative profitability weigh on the score.

Positive Factors

Expansion in AI Applications

Semtech is benefiting from leadership in optical components for high-speed AI connectivity applications, which significantly boosted its Infrastructure business.

Growth in LoRa Business

The company has seen strong growth in its LoRa business, with sales up significantly from previous quarters, showing a rebound and consistent growth.

New Product Opportunities

Semtech's proximity sensor has earned a position in the new Meta Ray-Ban AI smart glasses, with early volumes said to be promising.

Negative Factors

Demand Gap in CopperEdge

There is a near-term demand gap for CopperEdge due to architecture changes at NVIDIA.

IoT Systems Performance

IoT Systems performed worse than expected due to a seasonal decline.

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 and solutions, which are used in various applications across multiple sectors. The company has several key revenue streams, including the sale of LoRa devices and wireless radio frequency products, data center products, and various protection devices. Additionally, Semtech benefits from licensing its LoRa technology to third parties, creating an additional revenue stream through licensing agreements. Strategic partnerships with industry leaders in IoT and telecommunications also contribute significantly to its earnings, as these collaborations enable Semtech to expand its market reach and enhance the adoption of its technologies in various applications.

Semtech Financial Statement Overview

Summary

Semtech's financial performance is mixed, with a negative net income and high leverage posing risks. However, revenue growth and positive cash flow management offer some optimism for recovery.

Income Statement

Semtech's income statement reflects moderate challenges. The TTM data shows negative net income, resulting in a negative net profit margin, which indicates recent profitability issues. However, there is a positive revenue growth trend from the previous year, suggesting potential for recovery. Gross profit margin remains relatively stable, but the negative EBITDA margin highlights operational inefficiencies.

Balance Sheet

The balance sheet shows a mixed position. The debt-to-equity ratio is high, indicating significant leverage, which poses a financial risk. However, the company has managed to improve its equity position compared to previous periods, and the equity ratio suggests moderate asset financing through equity. The return on equity is negative due to recent losses, highlighting profitability concerns.

Cash Flow

Cash flow analysis highlights some positive aspects. The operating cash flow to net income ratio is positive, indicating good cash generation despite net losses. Free cash flow has shown growth, reflecting improved cash management. However, the free cash flow to net income ratio remains challenging due to negative net income, which impacts overall cash flow stability.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 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	130.82M	180.41M	100.18M
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: 49.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 49.39 is below the 20-day moving average (MA) of 51.17, above the 50-day MA of 47.96, and above the 200-day MA of 46.91, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 48.58 is Neutral, neither overbought nor oversold. The STOCH value of 29.88 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
CAMT	73 Outperform	$3.80B	30.78	24.28%	1.60%	27.88%	37.85%
SYNA	68 Neutral	$2.63B	14.47	-3.34%	―	11.98%	-138.59%
Sector *	61 Neutral	$35.38B	6.84	-10.99%	1.97%	8.74%	-8.28%
SLAB	57 Neutral	$4.35B	―	-9.71%	―	29.66%	47.97%
SMTC	57 Neutral	$4.21B	―	-93.41%	―	13.83%	88.14%
POWI	55 Neutral	$2.61B	78.98	4.68%	1.82%	7.16%	-21.24%
SITM	55 Neutral	$5.53B	―	-9.17%	―	65.12%	15.46%

Semtech Corporate Events

Semtech Reports Strong Q1 2026 Financial Results

On May 27, 2025, Semtech Corporation announced its financial results for the first quarter of fiscal year 2026, ending April 27, 2025. The company reported net sales of $251.1 million, marking a 22% year-over-year growth. The GAAP gross margin increased to 52.3%, and the non-GAAP adjusted gross margin rose to 53.5%. Semtech’s GAAP diluted earnings per share improved to $0.22 from a loss of $0.36 a year ago, while the non-GAAP adjusted diluted earnings per share increased to $0.38 from $0.06. The company highlighted strong business fundamentals, strategic investments, and debt reduction efforts as key factors contributing to its improved financial performance.