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1. Company Snapshot

1.a. Company Description

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms.It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications.The company also offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and wireless and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products used in industrial and consumer applications.


In addition, it provides power products consisting of switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging that control, alter, regulate, and condition the power within electronic systems.The company serves original equipment manufacturers and their suppliers in the enterprise computing, communications, and consumer and industrial end-markets.It sells its products directly, as well as through independent sales representative firms and independent distributors in North America, Europe, Asia- Pacific, and internationally.


The company was incorporated in 1960 and is headquartered in Camarillo, California.

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1.b. Last Insights on SMTC

Semtech Corporation's recent performance was driven by strong Q3 earnings, beating estimates with a quarterly earnings of $0.26 per share. The company's Signal Integrity and Analog Mixed Signal & Wireless product lines showed strength, contributing to the top-line growth. Additionally, Semtech's solid growth attributes, such as above-average growth in financials, position it well to outperform the market. Furthermore, analysts have raised their forecasts after the upbeat earnings, with the fourth-quarter guidance midpoint above estimates.

1.c. Company Highlights

2. Semtech's Q3 FY2026 Earnings: Strong Growth in Data Center and LoRa

Semtech Corporation reported a robust third quarter fiscal year 2026, with net sales reaching $267 million, up 4% sequentially and 13% year-over-year, driven by the company's data center and LoRa portfolio momentum. Adjusted operating margins expanded 180 basis points sequentially and 230 basis points year-over-year, resulting in adjusted diluted earnings per share of 48¢, up 17% sequentially and 85% year-over-year. The actual EPS of 0.48 beat estimates of 0.44.

Publication Date: Nov -30

📋 Highlights
  • Q3 Net Sales Growth: $267M, +4% sequentially, +13% YoY driven by data center ($56.2M, +30% YoY) and LoRa portfolios.
  • Margin Expansion: Adjusted operating margins rose 180 bps sequentially (to 20.6%) and 230 bps YoY, with EPS at 48¢ (+85% YoY).
  • Capital Structure Optimization: Convertible offering reduced interest expenses to <$3M annually from $75M Q3 2024, enhancing balance sheet flexibility.
  • Q4 Guidance: $273M (+9% YoY) net sales midpoint, with 51.2% adjusted gross margin and 17.8% operating margin expected.
  • Strategic Growth Drivers: LPO to contribute mid-single-digit revenue in Q4; Force Sensing acquisition (first shipment last week) and CopperEdge ramping for 2026 growth.

Financial Performance

The company's adjusted gross margin was 53%, with adjusted net operating expenses of $86.5 million, below the midpoint of the guidance range. Adjusted operating income was $54.9 million, up 13% sequentially and 26% year-over-year. Semtech's debt currently consists of $402.5 million of the 2030 notes and $100.5 million of the 2027 notes, with annualized interest expense under $3 million, a significant reduction from $75 million in the third quarter of last year.

Business Segment Performance

In terms of end markets, infrastructure net sales were $77.9 million, up 6% sequentially and 18% year-over-year, driven by the data center business. Net sales for data center were a record $56.2 million, up 8% sequentially and 30% year-over-year. The company expects an acceleration of sequential and year-over-year growth for the data center business, driven by fiber edge products and LPO.

Guidance and Outlook

For Q4, Semtech expects net sales of $273 million, plus or minus $5 million, up 9% year-over-year at the midpoint. The company expects adjusted gross margin to be 51.2%, plus or minus 50 basis points, reflecting sequential mix changes in the industrial end market. Analysts estimate next year's revenue growth at 15.6%.

Valuation

With a P/E Ratio of 270.23, P/B Ratio of 9.75, and EV/EBITDA of 74.52, the market appears to be pricing in high expectations for Semtech's future growth. The company's ROIC of 15.02% and ROE of 4.1% indicate a strong return on investment, but the high valuation multiples suggest that the stock may be fully valued.

Key Developments

The company has made significant progress in its LoRa business, with Gen 4 gaining momentum and multiprotocol capabilities being a key feature. Semtech is also ramping LPO with several leading US hyperscalers, and the design wins are expected to bring more content in transceivers. The acquisition of the Force Sensing business is expected to contribute to future revenue with healthy synergy.

3. NewsRoom

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Semtech Corporation (NASDAQ:SMTC) Receives Average Rating of “Moderate Buy” from Brokerages

Dec -04

Source: defenseworld.net

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Semtech Corporation (SMTC) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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Semtech Announces Participation at Upcoming Investor Conference

Dec -01

Source: businesswire.com

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HALPER SADEH LLC ENCOURAGES IRHYTHM TECHNOLOGIES, INC. SHAREHOLDERS TO CONTACT THE FIRM TO DISCUSS THEIR RIGHTS

Nov -30

Source: prnewswire.com

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Consumer Tech News (Nov 24-28): Lawmakers Target Meta Over Alleged Fraudulent Ads, U.S. Pushes Taiwan To Boost Chipmaking Investment In America & More

Nov -30

Source: feeds.benzinga.com

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Why One Fund Made a $59 Million Bet on Semtech Stock as Shares Surge to Multi-Year Highs

Nov -27

Source: fool.com

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Semtech Analysts Boost Their Forecasts After Q3 Earnings

Nov -25

Source: benzinga.com

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Semtech's Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

Nov -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.41%)

6. Segments

Internet of Things System

Expected Growth: 8%

Semtech's IoT system growth is driven by increasing demand for low-power wide-area networks (LPWANs), rising adoption of smart city and industrial IoT applications, and growing need for remote monitoring and sensor-based solutions. Additionally, advancements in LoRaWAN technology and strategic partnerships are fueling growth.

Analog Mixed Signal and Wireless

Expected Growth: 7%

Semtech's Analog Mixed Signal and Wireless segment growth is driven by increasing demand for IoT devices, 5G infrastructure, and high-speed data centers. Growing adoption of smart home devices, industrial automation, and autonomous vehicles also contribute to this growth. Additionally, the company's strategic acquisitions and investments in emerging technologies, such as LoRa, further boost its market share and revenue.

Signal Integrity

Expected Growth: 6%

Semtech's Signal Integrity segment growth is driven by increasing demand for high-speed data transmission in cloud computing, artificial intelligence, and 5G infrastructure. The proliferation of IoT devices and autonomous vehicles also fuels growth, as they require reliable, high-bandwidth signal transmission. Additionally, the need for low-latency and low-power signal processing in data centers and edge computing applications contributes to the segment's 6% growth.

Internet of Things Connected Services

Expected Growth: 9%

Semtech's IoT connected services growth is driven by increasing demand for low-power wide-area networks (LPWAN), rising adoption of smart city and industrial IoT applications, and growing need for real-time data analytics and monitoring. Additionally, the proliferation of 5G networks and government initiatives for IoT infrastructure development are fueling growth.

7. Detailed Products

LoRa

A wireless communication technology and IoT network protocol that enables low-power wide-area networks (LPWANs) for IoT applications

LoRaWAN

A wireless communication protocol and system architecture for LPWANs that enables IoT applications

BlueRiver

A technology that enables the creation of audio-video bridging (AVB) products for professional audio-video applications

Snowball

A family of high-performance, low-power, and low-cost wireless charging solutions

Neo-Iso

A family of isolated power switches that provide high isolation and low power consumption

Proximity and Touch Controllers

A family of proximity and touch controllers that enable touchless sensing and gesture recognition

8. Semtech Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Semtech Corporation's products are specialized and customized, making it difficult for substitutes to emerge. However, the increasing demand for IoT and 5G technologies may lead to the development of alternative solutions.

Bargaining Power Of Customers

Semtech Corporation's customers are diverse and fragmented, reducing their bargaining power. The company's products are also highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Semtech Corporation relies on a few key suppliers for its raw materials, giving them some bargaining power. However, the company's diversified supply chain and long-term contracts mitigate this risk.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures and technological expertise. This makes it difficult for new entrants to compete with established players like Semtech Corporation.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. Semtech Corporation faces intense rivalry from companies like Texas Instruments, Analog Devices, and STMicroelectronics.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 128.73%
Debt Cost 6.42%
Equity Weight -28.73%
Equity Cost 12.44%
WACC 4.69%
Leverage -448.10%

11. Quality Control: Semtech Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Everspin Technologies

A-Score: 4.0/10

Value: 1.4

Growth: 4.2

Quality: 5.2

Yield: 0.0

Momentum: 9.5

Volatility: 3.7

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Applied Optoelectronics

A-Score: 3.3/10

Value: 6.8

Growth: 0.8

Quality: 4.2

Yield: 0.0

Momentum: 8.0

Volatility: 0.3

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Transphorm

A-Score: 3.2/10

Value: 6.0

Growth: 3.3

Quality: 3.0

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

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QuickLogic

A-Score: 3.2/10

Value: 6.6

Growth: 5.9

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

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Semtech

A-Score: 3.0/10

Value: 0.5

Growth: 2.0

Quality: 4.7

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Alpha Omega Semi

A-Score: 2.4/10

Value: 4.8

Growth: 1.8

Quality: 3.9

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

79.75$

Current Price

79.75$

Potential

-0.00%

Expected Cash-Flows