Semtech (NASDAQ:SMTC) Trading Down 7.2% - Here's Why

Key Points

• Semtech shares fell 7.2% in Friday trading, with the stock dropping to an intraday low of $152.78 after closing at $166.33 the prior day.
• A Northland downgrade from Outperform to Market Perform weighed on the stock, as analysts cited valuation concerns, supply chain risks, and softer AI infrastructure spending.
• Despite the selloff, Semtech recently beat earnings and revenue expectations, reporting $0.51 EPS on $291 million in revenue, while analysts still broadly rate the stock a Moderate Buy.

Semtech Corporation (NASDAQ:SMTC - Get Free Report) shares dropped 7.2% during mid-day trading on Friday . The company traded as low as $152.78 and last traded at $154.3610. Approximately 2,116,785 shares were traded during trading, a decline of 9% from the average daily volume of 2,333,481 shares. The stock had previously closed at $166.33.

Key Headlines Impacting Semtech

Here are the key news stories impacting Semtech this week:

• Negative Sentiment: Northland downgraded Semtech to Market Perform from Outperform, citing valuation concerns and a more cautious view of the next few quarters, including risks tied to supply chain disruptions and softer AI infrastructure spending. Article Title
• Negative Sentiment: Recent insider activity may be adding to investor caution, with multiple executives selling shares over the past several months and no reported open-market insider purchases in that period. Article Title
• Negative Sentiment: TipRanks reported a newly disclosed risk tied to recent unregistered securities sales, which could create regulatory and financing concerns for the company. Article Title

Analyst Upgrades and Downgrades

SMTC has been the subject of a number of research analyst reports. TD Cowen reissued a "buy" rating on shares of Semtech in a research report on Tuesday, February 24th. Susquehanna increased their target price on shares of Semtech from $170.00 to $200.00 and gave the stock a "positive" rating in a research report on Wednesday. Citigroup downgraded shares of Semtech from a "buy" rating to a "market perform" rating in a research report on Tuesday. Northland Securities downgraded shares of Semtech from an "outperform" rating to a "market perform" rating in a research report on Tuesday. Finally, Weiss Ratings downgraded shares of Semtech from a "hold (c-)" rating to a "sell (d-)" rating in a research report on Tuesday, March 24th. Thirteen equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $179.73.

Semtech Price Performance

The company has a market capitalization of $14.33 billion, a price-to-earnings ratio of -394.85 and a beta of 2.22. The company has a debt-to-equity ratio of 0.86, a current ratio of 2.37 and a quick ratio of 1.66. The business has a fifty day moving average price of $107.16 and a 200 day moving average price of $88.86.

Semtech (NASDAQ:SMTC - Get Free Report) last announced its earnings results on Tuesday, May 26th. The semiconductor company reported $0.51 earnings per share for the quarter, beating the consensus estimate of $0.45 by $0.06. Semtech had a positive return on equity of 18.31% and a negative net margin of 3.05%.The business had revenue of $291.00 million during the quarter, compared to analysts' expectations of $283.53 million. During the same quarter last year, the business posted $0.38 earnings per share. The company's quarterly revenue was up 15.9% on a year-over-year basis. Semtech has set its Q2 2027 guidance at 0.590-0.630 EPS. On average, research analysts expect that Semtech Corporation will post 1.6 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, CEO Hong Q. Hou sold 2,000 shares of the stock in a transaction on Friday, April 10th. The stock was sold at an average price of $90.11, for a total value of $180,220.00. Following the completion of the transaction, the chief executive officer owned 73,228 shares in the company, valued at $6,598,575.08. This trade represents a 2.66% decrease in their position. The transaction was disclosed in a document filed with the SEC, 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 stock in a transaction on Wednesday, April 1st. The shares were sold at an average price of $81.73, for a total value of $612,975.00. Following the completion of the transaction, the executive vice president owned 8,811 shares of the company's stock, valued at $720,123.03. This trade represents a 45.98% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 36,884 shares of company stock worth $3,069,245 over the last three months. Company insiders own 0.48% of the company's stock.

Hedge Funds Weigh In On Semtech

Hedge funds and other institutional investors have recently modified their holdings of the stock. New York State Common Retirement Fund raised its stake in shares of Semtech by 55.7% during the 3rd quarter. New York State Common Retirement Fund now owns 277,661 shares of the semiconductor company's stock worth $19,839,000 after purchasing an additional 99,335 shares in the last quarter. Argos Wealth Advisors LLC purchased a new stake in shares of Semtech during the 4th quarter worth about $640,000. Lisanti Capital Growth LLC purchased a new stake in shares of Semtech during the 3rd quarter worth about $4,318,000. Hodges Capital Management Inc. bought a new position in shares of Semtech in the 3rd quarter valued at approximately $4,624,000. Finally, Atreides Management LP raised its stake in shares of Semtech by 2.4% in the 3rd quarter. Atreides Management LP now owns 678,133 shares of the semiconductor company's stock valued at $48,453,000 after acquiring an additional 16,192 shares in 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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