Semtech (NASDAQ:SMTC) stock is soaring over 25% in pre-market trading today, following a robust Q1FY24 earnings beat. Semtech posted a surprise adjusted profit of $0.02 per share, while analysts had expected an adjusted loss of $0.08 per share. Plus, net sales of $236.54 million grew 17% year-over-year and came in better than the consensus of $235 million.
Semtech manufactures and supplies analog and mixed-signal semiconductor products for high-end consumer, enterprise computing, communications, and industrial equipment.
Notably, results exceeded the midpoint of the company’s revenue and earnings guidance. Further, the company is on the path to improving its operational efficiency and financial performance, CEO Mohan Maheswaran stated. However, its shares have lost 22.5% year-to-date.
Semtech Q2 Guidance
Looking ahead, Semtech expects second-quarter net sales to be in the range of $233 and $243 million. Meanwhile, adjusted earnings are pegged between ($0.02) and $0.06 per share.
Is SMTC Stock a Good Buy?
Following the Q1 print, Robert W. Baird analyst Tristan Gerra designated Semtech as a “Fresh Pick” and is optimistic about the stock’s trajectory. Gerra highlighted the management’s remarks regarding the initial signs of recovery in China’s demand. Also, management is assertive that the acquisition of Sierra Wireless will be accretive in Fiscal 2024. The five-star analyst has a Buy rating on SMTC and a price target of $40, which implies 78.3% upside potential.
Based on seven Buys and one Hold rating, SMTC stock commands a Strong Buy consensus rating on TipRanks. The average Semtech Corporation price forecast of $39.50 implies an impressive 76.1% upside potential from current levels.
