Shares of Semtech Corp (NASDAQ:SMTC) tanked in early trading on Tuesday, after the company reported fourth-quarter results.
Here are the key analyst insights:
- Needham analyst Quinn Bolton maintained a Buy rating, while raising the price target from $100 to $105.
- Benchmark analyst Cody Acree reaffirmed a Buy rating and price target of $115.
Check out other analyst stock ratings.
Needham: Semtech reported solid results and slightly higher-than-expected revenue guidance for Q1 of fiscal 2027. Bolton highlighted:
- Datacenter growth due to ACC adoption and the ramp of 1.6T optical modules in the back half of the year
- The acquisition of optoelectronics manufacturer HieFo is expected to be earnings accretive within a year of the deal
- LoRa is likely to generate long-term growth of around 20%
- Management remains on course to divest non-core assets
Benchmark: Semtech posted revenue of $274.4 million and earnings of 44 cents per share. It beat Street expectations by about $1 million and 1 cent per share, respectively. The company guided to first-quarter revenue of $283 million and earnings of 45 cents per share, higher than consensus estimates by around $10 million and 2 cents per share, Acree said.
Investors seem to be concerned about "the durability of the company's data-center-driven inflection against near-term noise in its high-end consumer and industrial businesses and the practical realities of an extended period of laser capacity expansion post its HieFo acquisition," the analyst wrote. Semtech is "increasingly levered to the AI data center build-out," which is underappreciated compared to its legacy business model, he further stated.
SMTC Price Action: Shares of Semtech had declined by 5.54% to $84.06 at the time of publication on Tuesday.
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