Semtech (NASDAQ:SMTC) Shares Down 9.2% - Should You Sell?

Key Points

• Semtech shares fell 9.2% on Friday, closing at $108.40, with trading volume about 89% below its average.
• The company beat quarterly estimates, reporting EPS of $0.71 versus $0.61 expected and revenue of $341.87 million versus $328.67 million expected; revenue grew 32.7% year over year.
• Analysts maintain a “Moderate Buy” consensus rating with a $212 average price target. Company insiders sold 14,237 shares worth about $2.34 million over the past 90 days.

Semtech Corporation (NASDAQ:SMTC - Get Free Report) was down 9.2% during trading on Friday. The company traded as low as $109.32 and last traded at $108.3970. Approximately 306,324 shares changed hands during mid-day trading, a decline of 89% from the average session volume of 2,904,876 shares. The stock had previously closed at $119.44.

Wall Street Analysts Forecast Growth

Several research analysts recently commented on SMTC shares. Benchmark reaffirmed a "buy" rating on shares of Semtech in a research report on Thursday, August 20th. DA Davidson set a $230.00 price target on shares of Semtech in a report on Friday, October 16th. Oppenheimer boosted their price target on shares of Semtech from $200.00 to $225.00 and gave the company an "outperform" rating in a report on Thursday, October 1st. B. Riley Financial dropped their price objective on shares of Semtech from $210.00 to $190.00 and set a "buy" rating for the company in a research note on Monday. Finally, Morgan Stanley set a $205.00 price objective on shares of Semtech in a report on Friday, October 16th. One research analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $212.00.

Semtech Stock Down 5.9%

The stock has a market capitalization of $10.49 billion, a P/E ratio of 74.54 and a beta of 2.50. The company has a current ratio of 1.70, a quick ratio of 1.31 and a debt-to-equity ratio of 0.47. The firm's fifty day moving average is $154.04 and its 200-day moving average is $126.31.

Semtech (NASDAQ:SMTC - Get Free Report) last issued its quarterly earnings data on Tuesday, August 25th. The semiconductor company reported $0.71 earnings per share for the quarter, topping the consensus estimate of $0.61 by $0.10. Semtech had a net margin of 13.11% and a return on equity of 21.74%. The firm had revenue of $341.87 million for the quarter, compared to analysts' expectations of $328.67 million. During the same period in the prior year, the firm earned $0.41 earnings per share. The company's quarterly revenue was up 32.7% compared to the same quarter last year. Semtech has set its Q3 2027 guidance at 1.020-1.080 EPS. As a group, equities research analysts predict that Semtech Corporation will post 2.80 earnings per share for the current year.

Insider Buying and Selling

In other Semtech news, Director Paul V. Walsh, Jr. sold 500 shares of the stock in a transaction dated Wednesday, October 21st. The shares were sold at an average price of $139.44, for a total transaction of $69,720.00. Following the sale, the director owned 26,100 shares of the company's stock, valued at $3,639,384. This represents a 1.88% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Hong Q. Hou sold 2,000 shares of the business's stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $138.71, for a total transaction of $277,420.00. Following the completion of the transaction, the chief executive officer owned 60,799 shares of the company's stock, valued at $8,433,429.29. This trade represents a 3.18% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 14,237 shares of company stock valued at $2,337,597 in the last 90 days. 0.44% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the company. Polymer Capital Management US LLC raised its position in shares of Semtech by 30.1% during the third quarter. Polymer Capital Management US LLC now owns 90,050 shares of the semiconductor company's stock worth $16,060,000 after acquiring an additional 20,850 shares during the last quarter. Cvfg LLC bought a new position in Semtech in the third quarter valued at about $4,771,000. Meeder Advisory Services Inc. boosted its holdings in Semtech by 29.8% in the third quarter. Meeder Advisory Services Inc. now owns 2,145 shares of the semiconductor company's stock valued at $383,000 after acquiring an additional 493 shares during the last quarter. First Trust Advisors LP increased its position in Semtech by 68.9% in the third quarter. First Trust Advisors LP now owns 367,601 shares of the semiconductor company's stock worth $65,562,000 after purchasing an additional 149,972 shares during the period. Finally, Berkshire Capital Holdings Inc. increased its position in Semtech by 884,900.0% in the third quarter. Berkshire Capital Holdings Inc. now owns 88,500 shares of the semiconductor company's stock worth $15,784,000 after purchasing an additional 88,490 shares during the period.

About Semtech

Semtech Corporation is a semiconductor and connectivity technology company that develops products for communications, industrial, and consumer applications. Its portfolio includes analog and mixed-signal semiconductors, signal-integrity and protection products, and power-management solutions used in electronic systems. The company is known for LoRa technology, which supports low-power, long-range wireless communications for Internet of Things (IoT) devices. Semtech also provides cellular IoT modules, routers, and related services, expanding its connectivity offerings through its acquisition of Sierra Wireless in 2023.

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