Semtech (NASDAQ:SMTC) Sees Large Volume Increase on Earnings Beat

Key Points

• Semtech shares jumped in heavy trading after the company reported stronger-than-expected quarterly results, with volume rising 17% from the prior session. The stock was trading below its previous close after the earnings-driven move.
• First-quarter earnings beat estimates, with Semtech posting EPS of $0.51 versus the $0.45 consensus and revenue of $291 million versus $283.53 million expected. Revenue also increased 15.9% year over year.
• Management raised guidance for the next quarter, forecasting EPS of $0.59 to $0.63 and revenue of $323 million to $333 million, which came in above Wall Street expectations. Analysts also lifted price targets, reflecting a more bullish outlook.

Semtech Corporation (NASDAQ:SMTC - Get Free Report) shares saw unusually-strong trading volume on Wednesday following a stronger than expected earnings report. Approximately 2,623,319 shares traded hands during trading, an increase of 17% from the previous session's volume of 2,244,731 shares.The stock last traded at $160.5480 and had previously closed at $164.46.

The semiconductor company reported $0.51 EPS for the quarter, topping analysts' consensus estimates of $0.45 by $0.06. Semtech had a negative net margin of 3.86% and a positive return on equity of 18.09%. The firm had revenue of $291.00 million during the quarter, compared to analyst estimates of $283.53 million. During the same quarter in the previous year, the business earned $0.38 EPS. The business's quarterly revenue was up 15.9% compared to the same quarter last year. Semtech has set its Q2 2027 guidance at 0.590-0.630 EPS.

Key Semtech News

Here are the key news stories impacting Semtech this week:

• Positive Sentiment: Semtech beat first-quarter expectations, reporting EPS of $0.51 versus $0.45 expected and revenue of $291 million versus $283.5 million expected, with revenue up 15.9% year over year. Semtech Announces First Quarter of Fiscal Year 2027 Results
• Positive Sentiment: The company issued second-quarter guidance above Wall Street estimates, calling for EPS of $0.59 to $0.63 and revenue of $323 million to $333 million, signaling continued momentum. Semtech earnings and guidance report
• Positive Sentiment: Management and analysts pointed to accelerating demand in data center and optical products, including 800G FiberEdge and 1.6T ramps, which suggests growth could stay strong. SMTC Q1 Earnings Call Flags Faster Data Center Growth
• Positive Sentiment: Several analysts raised price targets after the results, including Needham to $200, Baird to $225, and UBS to $225, reinforcing a more bullish outlook for the stock. Semtech Price Target Raised to $225 as Data Center and Optical Growth Accelerate, Buy Rating Reiterated
• Neutral Sentiment: Northland Securities downgraded Semtech to market perform before the earnings release, but that call appears to have been overshadowed by the stronger-than-expected quarter and raised guidance.

Analysts Set New Price Targets

Several research analysts recently weighed in on SMTC shares. B. Riley Financial reissued a "buy" rating on shares of Semtech in a research note on Tuesday, May 12th. Susquehanna set a $200.00 target price on shares of Semtech in a report on Wednesday. Oppenheimer set a $200.00 price target on shares of Semtech in a research report on Wednesday. Stifel Nicolaus set a $188.00 price objective on shares of Semtech in a research report on Wednesday. Finally, Morgan Stanley set a $175.00 price objective on Semtech in a research note on Wednesday. Thirteen investment analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $159.87.

Insiders Place Their Bets

In related news, CFO Mark Lin sold 974 shares of the company's stock in a transaction on Wednesday, April 1st. The shares were sold at an average price of $78.42, for a total value of $76,381.08. Following the completion of the transaction, the chief financial officer directly owned 33,343 shares of the company's stock, valued at approximately $2,614,758.06. This represents a 2.84% decrease in their position. The sale was disclosed in a document filed 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, Director Paul V. Walsh, Jr. sold 500 shares of Semtech stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $138.21, for a total value of $69,105.00. Following the completion of the sale, the director directly owned 23,279 shares in the company, valued at $3,217,390.59. This represents a 2.10% 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 a total of 36,884 shares of company stock worth $3,069,245 in the last ninety days. 0.48% of the stock is owned by insiders.

Hedge Funds Weigh In On Semtech

A number of large investors have recently bought and sold shares of the company. Banque Cantonale Vaudoise acquired a new stake in shares of Semtech in the first quarter valued at approximately $33,000. Hantz Financial Services Inc. grew its position in Semtech by 243.2% in the third quarter. Hantz Financial Services Inc. now owns 508 shares of the semiconductor company's stock valued at $36,000 after purchasing an additional 360 shares in the last quarter. AlphaQuest LLC grew its position in Semtech by 42.5% in the third quarter. AlphaQuest LLC now owns 580 shares of the semiconductor company's stock valued at $41,000 after purchasing an additional 173 shares in the last quarter. Jones Financial Companies Lllp increased its stake in Semtech by 65.5% in the 3rd quarter. Jones Financial Companies Lllp now owns 594 shares of the semiconductor company's stock valued at $42,000 after buying an additional 235 shares during the last quarter. Finally, Assetmark Inc. lifted its position in Semtech by 1,745.5% during the 3rd quarter. Assetmark Inc. now owns 609 shares of the semiconductor company's stock worth $44,000 after buying an additional 576 shares in the last quarter.

Semtech Stock Down 3.1%

The firm's 50-day simple moving average is $104.05 and its 200 day simple moving average is $87.58. The company has a debt-to-equity ratio of 0.89, a quick ratio of 1.66 and a current ratio of 2.37. The stock has a market capitalization of $14.84 billion, a P/E ratio of -364.10 and a beta of 2.22.

About Semtech

Semtech Corporation is a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms. The company's products address a broad range of applications in the Internet of Things (IoT), data center and telecom, industrial, home automation, automotive, and aerospace markets. Semtech's portfolio includes power management, signal integrity, protection devices, wireless and sensing technologies that enable smarter, more connected systems worldwide.

A core offering from Semtech is its LoRa® technology, a low-power, long-range wireless communication platform that has become a de facto standard for global IoT deployments.

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