Semtech (NASDAQ:SMTC) Shares Gap Up - Time to Buy?

Key Points

• Premarket gap up: Semtech opened at $92.10 after closing at $88.66 but later traded down to $86.38 (about -3%) with roughly 604,242 shares changing hands.
• Analyst sentiment is a Moderate Buy (14 Buys, 1 Hold, 1 Sell) with a consensus price target of $93.14; several firms raised targets (Benchmark $115, Susquehanna $100) while Weiss Ratings downgraded to Sell.
• Semtech beat the quarter (EPS $0.44 vs $0.43; revenue $274.4M, +9.3% YoY) but posts a negative net margin (-3.86%) and negative P/E, and insiders have sold about $3.9M of stock in the past 90 days, including sales by the CFO and an EVP.

Semtech Corporation (NASDAQ:SMTC - Get Free Report)'s stock price gapped up prior to trading on Friday . The stock had previously closed at $88.66, but opened at $92.10. Semtech shares last traded at $86.3750, with a volume of 604,242 shares changing hands.

Wall Street Analyst Weigh In

SMTC has been the subject of a number of analyst reports. Susquehanna boosted their price target on Semtech from $90.00 to $100.00 and gave the company a "positive" rating in a report on Monday, March 9th. Benchmark reissued a "buy" rating and issued a $115.00 price objective on shares of Semtech in a report on Tuesday, March 17th. Stifel Nicolaus raised their price objective on Semtech from $90.00 to $98.00 and gave the company a "buy" rating in a report on Tuesday, March 17th. Weiss Ratings downgraded Semtech from a "hold (c-)" rating to a "sell (d-)" rating in a research note on Tuesday, March 24th. Finally, TD Cowen reaffirmed a "buy" rating on shares of Semtech in a research note on Tuesday, February 24th. Fourteen research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, Semtech has an average rating of "Moderate Buy" and a consensus price target of $93.14.

Semtech Trading Down 3.1%

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 firm has a market capitalization of $7.99 billion, a price-to-earnings ratio of -196.48 and a beta of 2.06. The company has a 50 day moving average price of $84.21 and a two-hundred day moving average price of $76.20.

Semtech (NASDAQ:SMTC - Get Free Report) last announced its earnings results on Monday, March 16th. The semiconductor company reported $0.44 earnings per share for the quarter, topping the consensus estimate of $0.43 by $0.01. Semtech had a positive return on equity of 18.09% and a negative net margin of 3.86%.The business had revenue of $274.40 million during the quarter, compared to the consensus estimate of $273.14 million. During the same period in the prior year, the company posted $0.40 EPS. The business's quarterly revenue was up 9.3% on a year-over-year basis. On average, research analysts forecast that Semtech Corporation will post -0.02 EPS for the current year.

Insider Transactions at Semtech

In related news, CFO Mark Lin sold 974 shares of the business's stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $78.42, for a total transaction of $76,381.08. Following the completion of the sale, the chief financial officer directly owned 33,343 shares in the company, valued at approximately $2,614,758.06. The trade was a 2.84% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Jason Elliot Green sold 7,500 shares of the business's stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $81.73, for a total value of $612,975.00. Following the sale, the executive vice president owned 8,811 shares of the company's stock, valued at $720,123.03. The trade was a 45.98% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 46,884 shares of company stock valued at $3,918,630 over the last ninety days. Company insiders own 0.48% of the company's stock.

Institutional Trading of Semtech

Hedge funds and other institutional investors have recently modified their holdings of the stock. Hantz Financial Services Inc. increased its stake in shares of Semtech by 243.2% in the 3rd quarter. Hantz Financial Services Inc. now owns 508 shares of the semiconductor company's stock worth $36,000 after acquiring an additional 360 shares during the last quarter. Salomon & Ludwin LLC acquired a new stake in shares of Semtech in the 3rd quarter worth $41,000. AlphaQuest LLC increased its stake in shares of Semtech by 42.5% in the 3rd quarter. AlphaQuest LLC now owns 580 shares of the semiconductor company's stock worth $41,000 after acquiring an additional 173 shares during the last quarter. Jones Financial Companies Lllp increased its stake in shares of Semtech by 65.5% in the 3rd quarter. Jones Financial Companies Lllp now owns 594 shares of the semiconductor company's stock worth $42,000 after acquiring an additional 235 shares during the last quarter. Finally, Assetmark Inc. increased its stake in shares of Semtech by 1,745.5% in the 3rd quarter. Assetmark Inc. now owns 609 shares of the semiconductor company's stock worth $44,000 after acquiring an additional 576 shares during the last quarter.

Semtech Company Profile

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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