Semtech (NASDAQ:SMTC) Shares Down 9.4% - Here's Why

Key Points

• Semtech shares fell 9.4% to about $127.57, significantly below the 50-day moving average of $157.11, on trading volume well below its daily average.
• Despite the decline, analysts maintain a “Moderate Buy” consensus with an average price target of $213.11, while recent earnings exceeded expectations and revenue increased 32.7% year over year.
• Insiders have sold 14,237 shares worth approximately $2.34 million over the past 90 days, although the reported transactions were conducted under pre-arranged Rule 10b5-1 trading plans.

Semtech Corporation (NASDAQ:SMTC - Get Free Report) dropped 9.4% during trading on Friday. The company traded as low as $125.60 and last traded at $127.5660. Approximately 355,090 shares changed hands during trading, a decline of 88% from the average daily volume of 2,866,489 shares. The stock had previously closed at $140.85.

Wall Street Analyst Weigh In

A number of brokerages have recently issued reports on SMTC. DA Davidson set a $230.00 price objective on shares of Semtech in a research note on Friday, October 16th. Zacks Research raised shares of Semtech from a "hold" rating to a "strong-buy" rating in a report on Monday, September 21st. Morgan Stanley set a $205.00 price target on Semtech in a report on Friday, October 16th. Benchmark restated a "buy" rating on shares of Semtech in a research report on Thursday, August 20th. Finally, TD Cowen reaffirmed a "buy" rating and issued a $215.00 price objective on shares of Semtech in a research note on Friday, October 16th. One investment analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $213.11.

Semtech Stock Performance

The firm's fifty day moving average price is $157.11 and its 200 day moving average price is $124.44. The firm has a market cap of $11.49 billion, a P/E ratio of 81.60 and a beta of 2.41. The company has a debt-to-equity ratio of 0.47, a quick ratio of 1.31 and a current ratio of 1.70.

Semtech (NASDAQ:SMTC - Get Free Report) last announced its earnings results on Tuesday, August 25th. The semiconductor company reported $0.71 earnings per share for the quarter, beating 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 company had revenue of $341.87 million during the quarter, compared to the consensus estimate of $328.67 million. During the same period last year, the firm earned $0.41 earnings per share. Semtech's 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. Sell-side analysts expect that Semtech Corporation will post 2.80 EPS for the current fiscal year.

Insider Buying and Selling

In related news, Director Paul V. Walsh, Jr. sold 500 shares of the business's stock in a transaction dated Wednesday, October 21st. The shares were sold at an average price of $139.44, for a total value of $69,720.00. Following the sale, the director directly owned 26,100 shares in the company, valued at approximately $3,639,384. The trade was a 1.88% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Jason Elliot Green sold 2,766 shares of the stock in a transaction dated Wednesday, October 7th. The stock was sold at an average price of $190.35, for a total transaction of $526,508.10. Following the sale, the executive vice president directly owned 7,367 shares in the company, valued at $1,402,308.45. This represents a 27.30% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 14,237 shares of company stock valued at $2,337,597 in the last 90 days. Corporate insiders own 0.44% of the company's stock.

Hedge Funds Weigh In On Semtech

Several institutional investors have recently added to or reduced their stakes in the stock. Osterweis Capital Management Inc. bought a new stake in shares of Semtech in the 2nd quarter worth approximately $9,783,000. Canada Pension Plan Investment Board bought a new stake in Semtech in the second quarter worth approximately $39,313,000. Swiss National Bank lifted its position in Semtech by 6.9% during the 1st quarter. Swiss National Bank now owns 183,000 shares of the semiconductor company's stock worth $14,071,000 after acquiring an additional 11,800 shares during the last quarter. Nicholas Investment Partners LP acquired a new position in shares of Semtech in the second quarter valued at $13,673,000. Finally, Sei Investments Co. grew its position in Semtech by 65.9% in the first quarter. Sei Investments Co. now owns 357,875 shares of the semiconductor company's stock valued at $27,517,000 after acquiring an additional 142,197 shares during the period.

Semtech Company Profile

Semtech Corporation NASDAQ: SMTC is a global semiconductor and infrastructure technology company that develops analog and mixed-signal products for communications, industrial, data center, consumer, and automotive applications. Its portfolio is designed to improve connectivity, power efficiency, signal integrity, and protection in electronic systems.

The company's products include high-speed connectivity solutions for data centers and communications networks, power management and protection devices, signal integrity components, and wireless and radio-frequency technologies.

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