While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice. Here's What You May Not Know About Analysts' Price Targets The mean estimate comprises 10 short-term price targets with a standard deviation of $8.35. While the lowest estimate of $30 indicates a 17.4% decline from the current price lev ...

Semtech (SMTC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are ...

Investment Thesis - The company has upgraded its rating from hold to buy due to increased confidence in industry recovery, supported by positive comments from peers and forward-looking booking data [4][9] - The previous concerns regarding elevated inventory impacting near-term growth have been addressed, with expectations of positive sequential growth moving forward [5][9] Financial Performance - Sequential growth decreased from 0.8% in Q2 2024 to 15.7% in Q3 2024 and 4% in Q4 2024, but the worst is believed to be over [5] - The IoT system sales backlog grew by 47% sequentially, with router bookings more than doubling both sequentially and annually, indicating a broad recovery across product families [5][6] - Channel inventories declined by 27% sequentially and 47% annually, suggesting normalization in inventory levels [5] Market Trends - Strong secular tailwinds, particularly from 5G adoption, are expected to drive growth, with significant increases in Module business bookings (22% sequential growth) and LoRa bookings (61% sequential growth) [5][6] - Demand for hyperscale data center applications has more than doubled compared to Q1 2024, driven by generative AI applications [6] Future Outlook - The company anticipates a return to normal business conditions, with expectations of 7% sequential growth for the remainder of FY25 and a total revenue year-over-year growth of 5% [7] - FY25 is expected to be the trough year, with growth acceleration projected for FY26 and FY27, reaching a peak of 15% year-over-year growth [7] - The target price for the company is set at approximately $48, based on FY27 numbers, reflecting increased confidence in long-term growth [7] Risks - The recent change in CEO may raise concerns about potential internal issues, although no changes to corporate strategy are expected [8] - The timing of recovery remains uncertain, particularly in the context of a high interest rate environment that may delay customer purchases [8]

Dublin, June 11, 2024 (GLOBE NEWSWIRE) -- The "Cellular and LPWA IoT Device Ecosystems - 8th Edition" report has been added to ResearchAndMarkets.com's offering. The Internet of Things is weaving a new worldwide web of interconnected objects. By the end of 2023, about 3.8 billion devices were connected to wide area networks based on cellular or LPWA technologies. The market is highly diverse and divided into multiple ecosystems. This research forecasts that annual shipments of cellular and non-3GPP LPWA IoT ...

Core Viewpoint - Semtech's recent earnings report revealed mixed results, with a non-GAAP profit that exceeded expectations but a significant GAAP loss, leading to a reassessment of the company's performance [1][3][5]. Financial Performance - Semtech reported a non-GAAP profit of $0.06 per share, while analysts had predicted no profit [1]. - The company's revenue for Q1 was $206.1 million, surpassing the expected $200.2 million but down 13% from the previous year [1][4]. - The GAAP loss was $0.36 per share, which is an improvement from the $0.46 loss reported a year ago [3][4]. Market Reaction - Following the earnings announcement, Semtech's stock initially surged by 21% but later retreated to a gain of only 0.5% by midday [2]. Future Outlook - Semtech anticipates returning to GAAP profitability in Q2, projecting a profit between $0.06 and $0.12 per share [6]. - Analysts remain skeptical, predicting continued losses for the year and a return to profitability not expected until fiscal 2026 [6]. - The company's current valuation stands at $2.5 billion, with $1.2 billion in net debt, raising concerns about its investment appeal [6].

Semtech Corporation's (SMTC) first-quarter fiscal 2025 non-GAAP earnings of 6 cents per share beat the Zacks Consensus Estimate of the break-even point. The bottom line increased 50% year over year. Net sales of $206.1 million surpassed the Zacks Consensus Estimate of $200.2 million. The figure decreased 12.9% from the prior-year quarter. Nevertheless, growing momentum in the Signal Integrity, and Analog Mixed Signal & Wireless product lines remained a plus. Improving performances in the infrastructure and ...

Core Viewpoint - Semtech Co. has recently experienced a significant stock price breakout, reaching 89% of its 52-week high, driven by positive quarterly earnings and strong market positioning in the AI and IoT sectors [1][2]. Company Performance - Semtech's stock had been stagnant within a $20 to $30 range for two years before the recent earnings report [1]. - The stock price is currently at $42.61, reflecting a 3.48% increase [2]. - Analysts project a price target of $60 per share, indicating a potential upside of 56.6% from current levels [11]. Market Position and Customer Base - Semtech holds an impressive 80% market share in the passive optical network space, showcasing strong adoption rates for its services [9]. - Major clients include Comcast and Apple, which enhances Semtech's credibility as a technology provider [4]. Financial Metrics - The company reported a gross margin of 49.5% in the latest quarter, up from 48.6% over the past year [12]. - Free cash flow improved significantly to $12.2 million in the last quarter, compared to a negative $12.4 million in the previous quarter [18]. Growth Potential - Semtech is expected to achieve an industry-leading EPS growth rate of up to 142% this year, surpassing Nvidia's growth rate of 20.3% [16]. - The company's technology is crucial for AI applications, optimizing data processing and power efficiency for machine learning models [15]. Economic Context - The overall market is influenced by expectations of interest rate cuts, with the Federal Reserve's timeline shifting to September 2024 [5]. - Despite economic challenges, Semtech's growth trajectory appears resilient and independent of interest rate fluctuations [16].

Financial Data and Key Metrics Changes - The company recorded net sales of $206.1 million for Q1 FY '25, representing a 7% sequential increase and exceeding the high end of guidance [31] - Gross margin improved to 49.8%, up 90 basis points sequentially and 130 basis points year-over-year, attributed to favorable product mix and cost control [32] - Operating income was $25.2 million with an operating margin of 12.2%, reflecting a sequential increase of 300 basis points and a year-over-year increase of 290 basis points [34] - Free cash flow for the first quarter was a use of cash amounting to $1.4 million, influenced by working capital changes [38] Business Line Data and Key Metrics Changes - Infrastructure net sales reached $56 million, a sequential increase of 42% and up 44% year-over-year [9] - High-End Consumer net sales were $34.5 million, an 8% sequential increase and a 60% year-over-year increase [17] - Industrial net sales were $115.6 million, down 5% sequentially, with IoT systems business net sales down 26% sequentially and 57% year-over-year [22] - Connected services businesses recorded net sales of $24.1 million, effectively flat quarter-over-quarter [25] Market Data and Key Metrics Changes - In the Infrastructure market, data center applications saw net sales of $21.2 million, up 20% sequentially and 61% year-over-year [10] - Passive optical network products net sales were $27.2 million, an 88% sequential increase and a 64% year-over-year increase [15] - The company noted strong demand for its LoRa-enabled solutions, with net sales of RF industrial products increasing 76% sequentially and 19% year-over-year [25] Company Strategy and Development Direction - The company is focused on reducing overall debt and evaluating capital structure alternatives, including potential asset sales [52][53] - The management emphasized the importance of AI in driving growth, particularly in data center applications and active copper cables [11][12] - The company is committed to maintaining cost control while supporting customer projects, with operating expenses down 17% year-over-year [33] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the Industrial segment, with bookings activity indicating a potential recovery in the second half of FY '25 [22] - The company expects net sales for Q2 FY '25 to be around $212 million, with growth anticipated in the Infrastructure end market [45] - Management highlighted that the telecom segment remains muted, with no immediate visibility for improvement [123] Other Important Information - The company ended the first quarter with a cash balance of $126.8 million, with inventories down 30% year-over-year [37] - The company expects gross margin to be around 50% for the next quarter, with operating expenses projected at $77.5 million [39] Q&A Session Summary Question: Clarification on active copper cable opportunity - Management clarified that they are involved in both vertical and horizontal applications, with ongoing qualifications and purchase orders from cable manufacturers [48][58] Question: Expectations for operational expenses - Management indicated that operational expenses are at a stable level and expected to grow at half the rate of sales moving forward [60] Question: Revenue expectations for active copper cables in fiscal '26 - Management estimated a reasonable expectation of a $100 million opportunity for active copper cables, with potential for higher growth depending on shipping configurations [66][99] Question: Long-term growth rate for LoRa - Management expects double-digit growth for the LoRa opportunity, supported by new protocols and market expansion [112] Question: Outlook for PON and its drivers - Management noted that PON is experiencing a recovery, particularly driven by infrastructure upgrades in China, with expectations for continued growth [108][110]

Semtech (SMTC) reported $206.11 million in revenue for the quarter ended April 2024, representing a year- over-year decline of 12.9%. EPS of $0.06 for the same period compares to $0.02 a year ago. ...

Financial Performance - Net sales for the first quarter of fiscal year 2025 were $206.1 million, a decrease of 12.9% compared to $236.5 million in the first quarter of fiscal year 2024[177]. - The Signal Integrity segment reported net sales of $58.3 million, up from $40.9 million in the prior year, representing a 42.5% increase[165]. - The Analog Mixed Signal and Wireless segment generated $75.3 million in net sales, compared to $59.6 million in the same period last year, reflecting a 26.4% increase[165]. - The IoT Systems and Connectivity segment saw a decline in net sales to $72.5 million from $136.0 million, a decrease of 46.6% year-over-year[165]. - Industrial end market net sales decreased by 34% to $115.6 million, primarily due to lower module and router sales[177]. - The infrastructure end market saw a 44% increase in net sales to $56.0 million, driven by strong demand in PON and data center sales[177]. - Net sales for the first quarter of fiscal year 2025 were $206.1 million, a decrease of 13% compared to $236.5 million in the first quarter of fiscal year 2024[178]. - Signal Integrity segment net sales increased by 43% to $58.3 million, driven by a $10.6 million increase in PON sales and an $8.0 million increase in data center sales[178]. - Analog Mixed Signal and Wireless segment net sales rose by 26% to $75.3 million, primarily due to a $9.9 million increase in TVS product sales[178]. - IoT Systems and Connectivity segment net sales decreased by 47% to $72.5 million, mainly due to a $47.4 million decrease in module sales and a $16.0 million decrease in router sales[178]. Profitability and Margins - Gross profit margin improved to 48.3% in the first quarter of fiscal year 2025, compared to 43.5% in the same quarter of fiscal year 2024[175]. - Operating income for the first quarter of fiscal year 2025 was 1.5%, a significant improvement from a loss of 5.0% in the prior year[175]. - Net loss attributable to common stockholders was 11.2% for the first quarter of fiscal year 2025, compared to 12.4% in the same period last year[175]. - Gross profit for the first quarter of fiscal year 2025 was $99.6 million, down from $102.9 million in the same period last year, reflecting a decrease of $3.4 million[179]. - Gross margin improved to 48.3% in the first quarter of fiscal year 2025, compared to 43.5% in the first quarter of fiscal year 2024[180]. Expenses and Cash Flow - Total operating expenses decreased by 16% to $96.4 million in the first quarter of fiscal year 2025, down from $114.8 million in the prior year[181]. - Interest expense increased to $23.2 million in the first quarter of fiscal year 2025, up from $20.5 million in the same period last year, primarily due to higher interest rates[186]. - Net cash used in operating activities for the three months ended April 28, 2024, was $(89) thousand, compared to $(89,987) thousand for the same period in fiscal year 2024[217]. - The company did not borrow or make payments on its Revolving Credit Facility in the first three months of fiscal year 2025, while it borrowed $40.0 million in the same period of fiscal year 2024[224]. Capital Expenditures and Financing - Capital expenditures for the first three months of fiscal year 2025 were $1.3 million, significantly lower than $14.0 million for the same period in fiscal year 2024[221]. - The company plans to finance capital expenditures and R&D through cash generated from operating activities and existing cash balances[212]. - The company expects future non-operating uses of cash to be for capital expenditures and debt repayment, funded through cash flows from operating activities[199]. - The company issued $300.0 million and $19.5 million in Convertible Senior Notes due 2027, bearing interest at 1.625% per year, with a maturity date of November 1, 2027[207]. - The company issued $250.0 million in Convertible Senior Notes due 2028, bearing interest at 4.00% per year, with a maturity date of November 1, 2028[209]. Compliance and Share Repurchase - As of April 28, 2024, the company was in compliance with the financial covenants in its Credit Agreement[205]. - The company did not repurchase any shares under its stock repurchase program in the first three months of fiscal year 2025 or fiscal year 2024, with remaining authorization of $209.4 million as of April 28, 2024[214]. - As of April 28, 2024, the company had $126.8 million in cash and cash equivalents and $282.2 million of available undrawn borrowing capacity[193].