Verizon Frontline has granted its "Verizon Frontline Verified" status to a collection of products from Semtech (SMTC, Financial), previously known as Sierra Wireless. A key product among these is the AirLink XR605GRouter, which is compatible with the newly introduced Verizon Frontline Network Slice. This recognition highlights Semtech’s commitment to providing innovative solutions tailored for Verizon’s advanced network capabilities.
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 $55.50 with a high estimate of $68.00 and a low estimate of $43.00. The average target implies an upside of 27.12% from the current price of $43.66. 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 $28.79, suggesting a downside of 34.06% from the current price of $43.66. 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: May 27, 2025
- Net Sales: $251.1 million, up 22% year over year.
- Adjusted Gross Margin: 53.5%, up 30 basis points sequentially and 370 basis points year over year.
- Adjusted Operating Income: $47.6 million, with an adjusted operating margin of 19%, up 680 basis points year over year.
- Adjusted EBITDA: $55.4 million, up 68% year over year, with an adjusted EBITDA margin of 22.1%, up 600 basis points year over year.
- Adjusted Diluted Earnings Per Share: $0.38, up from $0.06 a year ago.
- Operating Cash Flow: $27.8 million.
- Free Cash Flow: $26.2 million.
- Net Debt: Decreased by $14.8 million to $396.2 million.
- Infrastructure Net Sales: $72.8 million, up 5% sequentially and 30% year over year.
- Data Center Net Sales: $51.6 million, up 3% sequentially and 143% year over year.
- High-End Consumer Net Sales: $35.4 million, flat sequentially and up 3% year over year.
- Industrial Net Sales: $142.8 million, down 3% sequentially and up 24% year over year.
- LoRa Enabled Solutions Net Sales: $38.9 million, up 5% sequentially and 81% year over year.
- IoT Systems Hardware Net Sales: $63.5 million, down 8% sequentially and up 31% 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 Q1 net sales of $251.1 million, exceeding the midpoint of their outlook and marking a 22% year-over-year increase.
- The company's adjusted gross margin improved to 53.5%, up 370 basis points year over year.
- Infrastructure net sales grew by 30% year over year, with data center sales reaching a record $51.6 million, up 143% year over year.
- Semtech's CopperEdge technology offers significant power savings and extended reach, positioning it as a strong solution for next-generation AI clusters.
- The company has made strides in portfolio optimization and strategic R&D investments, aiming to drive margin expansion and shareholder value.
Negative Points
- The IoT systems hardware business saw an 8% sequential decline in net sales, although it was still up 31% year over year.
- Gross margins in the cellular module business were down both quarter-on-quarter and year-on-year, partly due to a mix shift and a one-time inventory event.
- LoRa net sales are expected to decline slightly in the next quarter, despite strong year-over-year growth.
- The company faces macroeconomic uncertainties that may impact the timing of some portfolio optimization initiatives.
- There was a noted air pocket in demand for CopperEdge due to platform changes with an anchor customer, affecting short-term revenue.
