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Semtech Shares Hit 52-Week High: Will the Bull Run Continue?
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Semtech Corporation (SMTC - Free Report) shares hit a 52-week high of $48.24 on Wednesday and eventually closed at $47.47, up 116.6% year to date (YTD). Shares have outperformed the broader Zacks Computer & Technology sector’s return of 23.1%.
Shares of Monolithic Power Systems, MACOM Technology Solutions and Analog Devices have returned 45%, 14.1% and 14.1%, respectively. Industry has appreciated 5.9% YTD.
Will Semtech’s bull run continue? Let’s analyze its fundamental strengths and weaknesses.
The phenomenal rise in SMTC’s share price can be attributed to its strong top-line growth aided by strength in Signal Integrity, Analog Mixed Signal & Wireless product lines.
Trends, such as increasing bandwidth over high-speed networks and growing demand for more sustainable management in residential and industrial settings, are further driving demand for SMTC’s products. These are considered key factors for share price movement.
In the first half of fiscal 2025, the infrastructure end market contributed about 26% of SMTC's revenues, marking a 34% increase from the previous year. Infrastructure revenues accounted for 25% of the total second-quarter fiscal 2025 revenues, driven by robust demand for FiberEdge TIAs, laser drivers and Tri-Edge 50G PAM4 products.
Semtech’s expanding portfolio is a key catalyst. The availability of a one-channel LoRaWAN hub reference design and evaluation kit targeting smaller-scale network deployments, such as for SMB/SME and smart home applications, is a noteworthy development.
SMTC unveiled RClamp0822BTransient to its Voltage Suppressors product portfolio. It is uniquely designed to protect high-speed data interfaces across industrial, data center and telecommunication applications.
The AirLink XR60 5G Router, a new networking technology designed to provide 5G and Wi-Fi 6 performance in a small and durable design for highly demanding environments, is expected to boost Semtech’s footprint in the 5G infrastructure domain.
SMTC’s economical Fiber-to-the-room (FTTR) deployments through its latest PON-X solutions, the GN25L81 2.5G combo chip and the GN25L42 2.5G burst mode PIN trans-impedance amplifier (Super TIA) devices for 2.5G PON FTTR Optical Line Terminal applications advance its already strong portfolio.
Traxmate Collaboration Bodes Well for SMTC
Semtech entered into a definite agreement with Traxmate, a leading global IoT tracking platform provider, to offer a hassle-free indoor and outdoor asset tracking solution.
Traxmate's precise location and tracking services are seamlessly integrated with Semtech's low-power, location-aware LoRa Edge platform, delivering an efficient solution for positioning, tracking and routing IoT-connected assets.
SMTC Offers Positive Q3 Guidance
For third-quarter fiscal 2025, SMTC expects net sales to be $233 million (+/- $5 million). The Zacks Consensus Estimate for the same is pegged at $233 million, suggesting year-over-year growth of 15.8%.
It anticipates net sales in the infrastructure end market to increase sequentially, driven by strong demand for data center applications for the third quarter of fiscal 2025. SMTC also expects industrial net sales to be slightly up.
The non-GAAP gross margin is expected to be 52% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 17.2% (+/- 80 bps).
The non-GAAP earnings are expected to be 23 cents (+/- 3 cents) per share. The consensus mark for earnings is pegged at 24 cents per share, up 14.3% over the past 30 days.
Zacks Rank and Valuation
Semtech shares are overvalued at this moment, as suggested by a Value Score of F.
Image: Bigstock
Semtech Shares Hit 52-Week High: Will the Bull Run Continue?
Semtech Corporation (SMTC - Free Report) shares hit a 52-week high of $48.24 on Wednesday and eventually closed at $47.47, up 116.6% year to date (YTD). Shares have outperformed the broader Zacks Computer & Technology sector’s return of 23.1%.
SMTC shares have also outperformed the Zacks Semiconductor – Analog and Mixed industry, as well as peers like Monolithic Power Systems (MPWR - Free Report) , MACOM Technology Solutions (MTSI - Free Report) and Analog Devices (ADI - Free Report) in the same time frame.
Shares of Monolithic Power Systems, MACOM Technology Solutions and Analog Devices have returned 45%, 14.1% and 14.1%, respectively. Industry has appreciated 5.9% YTD.
Will Semtech’s bull run continue? Let’s analyze its fundamental strengths and weaknesses.
Semtech Corporation Price and Consensus
Semtech Corporation price-consensus-chart | Semtech Corporation Quote
Portfolio Expansion Boosts SMTC’s Prospects
The phenomenal rise in SMTC’s share price can be attributed to its strong top-line growth aided by strength in Signal Integrity, Analog Mixed Signal & Wireless product lines.
Trends, such as increasing bandwidth over high-speed networks and growing demand for more sustainable management in residential and industrial settings, are further driving demand for SMTC’s products. These are considered key factors for share price movement.
In the first half of fiscal 2025, the infrastructure end market contributed about 26% of SMTC's revenues, marking a 34% increase from the previous year. Infrastructure revenues accounted for 25% of the total second-quarter fiscal 2025 revenues, driven by robust demand for FiberEdge TIAs, laser drivers and Tri-Edge 50G PAM4 products.
Semtech’s expanding portfolio is a key catalyst. The availability of a one-channel LoRaWAN hub reference design and evaluation kit targeting smaller-scale network deployments, such as for SMB/SME and smart home applications, is a noteworthy development.
SMTC unveiled RClamp0822BTransient to its Voltage Suppressors product portfolio. It is uniquely designed to protect high-speed data interfaces across industrial, data center and telecommunication applications.
The AirLink XR60 5G Router, a new networking technology designed to provide 5G and Wi-Fi 6 performance in a small and durable design for highly demanding environments, is expected to boost Semtech’s footprint in the 5G infrastructure domain.
SMTC’s economical Fiber-to-the-room (FTTR) deployments through its latest PON-X solutions, the GN25L81 2.5G combo chip and the GN25L42 2.5G burst mode PIN trans-impedance amplifier (Super TIA) devices for 2.5G PON FTTR Optical Line Terminal applications advance its already strong portfolio.
Traxmate Collaboration Bodes Well for SMTC
Semtech entered into a definite agreement with Traxmate, a leading global IoT tracking platform provider, to offer a hassle-free indoor and outdoor asset tracking solution.
Traxmate's precise location and tracking services are seamlessly integrated with Semtech's low-power, location-aware LoRa Edge platform, delivering an efficient solution for positioning, tracking and routing IoT-connected assets.
SMTC Offers Positive Q3 Guidance
For third-quarter fiscal 2025, SMTC expects net sales to be $233 million (+/- $5 million). The Zacks Consensus Estimate for the same is pegged at $233 million, suggesting year-over-year growth of 15.8%.
It anticipates net sales in the infrastructure end market to increase sequentially, driven by strong demand for data center applications for the third quarter of fiscal 2025. SMTC also expects industrial net sales to be slightly up.
The non-GAAP gross margin is expected to be 52% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 17.2% (+/- 80 bps).
The non-GAAP earnings are expected to be 23 cents (+/- 3 cents) per share. The consensus mark for earnings is pegged at 24 cents per share, up 14.3% over the past 30 days.
Zacks Rank and Valuation
Semtech shares are overvalued at this moment, as suggested by a Value Score of F.
SMTC currently carries a Zacks Rank #3 (Hold), implying that investors should wait for a favorable entry point into the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.