Semtech (NASDAQ:SMTC) Shares Gap Up - What's Next?

Key Points

• Semtech shares opened sharply higher, rising from a prior close of $124.88 to $131.05 before trading back near $124.56. The stock has a consensus “Moderate Buy” rating and an average analyst price target of $189.47, with several firms recently raising targets as high as $230.
• Semtech’s latest quarterly results exceeded expectations: adjusted EPS was $0.51 versus a $0.45 estimate, while revenue rose 15.9% year over year to $291.02 million. The company issued quarterly EPS guidance of $0.59–$0.63, and analysts project $1.81 in EPS for the fiscal year.
• Institutional ownership has increased significantly, including new positions from BlackRock and Andar Capital and a 396.3% holding increase by UBS Asset Management. However, insiders sold 21,734 shares worth approximately $3.13 million over the past 90 days, largely under pre-arranged trading plans.

Shares of Semtech Corporation (NASDAQ:SMTC - Get Free Report) gapped up prior to trading on Friday . The stock had previously closed at $124.88, but opened at $131.05. Semtech shares last traded at $124.56, with a volume of 398,596 shares trading hands.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently commented on the company. Morgan Stanley upped their target price on Semtech from $155.00 to $175.00 and gave the company an "equal weight" rating in a research report on Wednesday, May 27th. Mizuho set a $225.00 price objective on shares of Semtech in a research note on Wednesday, May 27th. Roth Capital increased their price objective on shares of Semtech from $102.00 to $190.00 and gave the stock a "buy" rating in a research note on Wednesday, May 27th. Zacks Research upgraded shares of Semtech from a "hold" rating to a "strong-buy" rating in a research report on Monday, June 29th. Finally, New Street Research set a $230.00 price target on shares of Semtech in a report on Thursday. One analyst has rated the stock with a Strong Buy rating, fourteen have given a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $189.47.

Semtech Stock Performance

The firm's 50 day moving average is $138.72 and its 200-day moving average is $117.40. The stock has a market capitalization of $11.53 billion, a price-to-earnings ratio of -317.49 and a beta of 2.35. The company has a debt-to-equity ratio of 0.86, a quick ratio of 1.62 and a current ratio of 2.37.

Semtech (NASDAQ:SMTC - Get Free Report) last released its quarterly earnings results on Tuesday, May 26th. The semiconductor company reported $0.51 EPS for the quarter, beating the consensus estimate of $0.45 by $0.06. Semtech had a negative net margin of 3.05% and a positive return on equity of 18.31%. The company had revenue of $291.02 million for the quarter, compared to analyst estimates of $283.53 million. During the same quarter last year, the business earned $0.38 earnings per share. The firm's revenue was up 15.9% on a year-over-year basis. Semtech has set its Q2 2027 guidance at 0.590-0.630 EPS. Analysts forecast that Semtech Corporation will post 1.81 earnings per share for the current fiscal year.

Insider Activity at Semtech

In other Semtech news, CEO Hong Q. Hou sold 2,000 shares of the firm's stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $133.00, for a total value of $266,000.00. Following the sale, the chief executive officer directly owned 64,799 shares of the company's stock, valued at approximately $8,618,267. This trade represents a 2.99% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Jason Elliot Green sold 2,264 shares of the stock in a transaction that occurred on Tuesday, July 7th. The shares were sold at an average price of $129.90, for a total value of $294,093.60. Following the transaction, the executive vice president owned 8,611 shares in the company, valued at $1,118,568.90. This trade represents a 20.82% 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 have sold a total of 21,734 shares of company stock valued at $3,133,986 in the last ninety days. 0.44% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Andar Capital Management HK Ltd acquired a new stake in shares of Semtech in the second quarter valued at about $162,000,000. BlackRock Inc. acquired a new position in Semtech during the second quarter worth about $1,577,947,000. Think Investments LP purchased a new stake in Semtech during the 3rd quarter valued at about $58,618,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its holdings in Semtech by 396.3% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 842,125 shares of the semiconductor company's stock valued at $136,298,000 after acquiring an additional 672,447 shares during the last quarter. Finally, Ameriprise Financial Inc. lifted its stake in Semtech by 10.3% in the 2nd quarter. Ameriprise Financial Inc. now owns 7,112,097 shares of the semiconductor company's stock worth $321,040,000 after purchasing an additional 666,456 shares in the last quarter.

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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