Semtech’s 4Q Results Beat Analysts’ Expectations As Sales Outperform; Shares Gain 3%

Shares of Semtech Corporation rose 3.1% in Wednesday’s extended trading session after the semiconductor company reported better-than-expected fiscal 4Q (ended Jan. 31) results, driven by top-line growth.

Semtech’s (SMTC) 4Q adjusted earnings grew 27.5% to $0.51 per share on a year-over-year basis and beat the Street estimates of $0.48 per share. Net sales advanced 19.3% to $164.7 million and surpassed the consensus estimate of $158.29 million.

The company’s adjusted gross margin came in at 61.5%, in line with the prior-year quarter. (See Semtech stock analysis on TipRanks)

For the first quarter of the fiscal year 2022, the company projects adjusted EPS to range from $0.49 to $0.55 per share, versus the consensus estimate of $0.47. Net sales are anticipated to be in the range of $164 million to $172 million, versus analysts’ expectations of $155 million.

Following the 4Q results, Oppenheimer analyst Rick Schafer maintained a Buy rating and a price target of $80 (9.5% upside potential) on the stock.

Schafer views “5G, DC and LoRa supporting an accelerated growth story.”

Furthermore, the analyst believes “LoRa cloud services is poised to drive future benchmark wins.” He added, “LoRa remains SMTC’s top growth/upside driver with potential for a 40%-plus 5-yr CAGR.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys versus 1 Hold. The average analyst price target of $78.67 implies 7.6% upside potential to current levels. Shares have increased 40.2% over the past six months.

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