Semtech (SMTC, Financial) has forecasted its second-quarter revenue to be approximately $256 million, with a possible variation of $5 million either way. This projection closely aligns with market expectations, which have anticipated revenue around $255.55 million. The company's financial outlook demonstrates a steady performance, reinforcing investor confidence in its operational stability.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Semtech Corp (SMTC, Financial) is $54.17 with a high estimate of $68.00 and a low estimate of $30.00. The average target implies an upside of 39.68% from the current price of $38.78. More detailed estimate data can be found on the Semtech Corp (SMTC) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Semtech Corp's (SMTC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Semtech Corp (SMTC, Financial) in one year is $31.97, suggesting a downside of 17.56% from the current price of $38.78. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Semtech Corp (SMTC) Summary page.
SMTC Key Business Developments
Release Date: March 13, 2025
- Net Sales: $251 million, up 6% sequentially.
- Adjusted Gross Margin: 53.2%, up 80 basis points sequentially and 430 basis points year over year.
- Adjusted Operating Income: $49.8 million, with an adjusted operating margin of 19.9%.
- Adjusted EBITDA: $57.8 million, with an adjusted EBITDA margin of 23%.
- Adjusted Diluted Earnings Per Share: $0.40, up from $0.26 in Q3.
- Operating Cash Flow: $33.5 million.
- Free Cash Flow: $30.9 million.
- Cash and Cash Equivalents: $151.7 million.
- Net Debt: $411 million, reduced by $868 million from FY24.
- Infrastructure Net Sales: $69.1 million, up 5% sequentially and 75% year over year.
- Data Center Net Sales: $50 million, up 16% sequentially and 183% year over year.
- High-End Consumer Net Sales: $35.4 million, up 10% year over year.
- Industrial Net Sales: $146.6 million, up 12% sequentially and 21% year over year.
- LoRa Enabled Solutions Net Sales: $37.1 million, up 28% sequentially and 205% year over year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Semtech Corp (SMTC, Financial) reported sequential growth in net sales, gross margin, operating margin, and earnings per share for each quarter of fiscal year 2025.
- The company achieved a 200 basis point improvement in adjusted gross margin and a 570 basis point improvement in adjusted operating margin year over year.
- Net sales for the data center segment reached a record $50 million, up 16% sequentially and 183% year over year.
- Semtech Corp (SMTC) significantly reduced its net debt by 68% from the previous fiscal year, enhancing financial stability.
- The company is focusing on strategic investment in R&D to drive sustainable long-term growth and maintain financial discipline.
Negative Points
- The expected volume ramp for copper edge products will not materialize for FY26 due to changes in rack architecture, leading to lower demand for 3 to 4 quarters.
- The industrial market is expected to decline in the first quarter of FY26 due to seasonality in the IoT portfolio.
- Copper edge revenue is projected to be below $50 million for FY26, indicating a temporary setback in this segment.
- The company faces challenges in portfolio rationalization due to market uncertainties, impacting strategic alignment.
- Semtech Corp (SMTC) anticipates a sequential decline in the industrial segment for the first quarter of FY26, reflecting seasonal trends.
