Semtech (NASDAQ:SMTC) Posts Earnings Results, Beats Expectations By $0.10 EPS

Semtech (NASDAQ:SMTC) announced its quarterly earnings data on Tuesday. The semiconductor company reported $0.71 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.61 by $0.10, FiscalAI reports. Semtech had a positive return on equity of 18.31% and a negative net margin of 3.05%.The company had revenue of $341.90 million for the quarter, compared to analysts’ expectations of $328.67 million. During the same quarter in the prior year, the business posted $0.41 EPS. The business’s revenue was up 32.7% compared to the same quarter last year. Semtech updated its Q3 2027 guidance to 1.020-1.080 EPS.

Here are the key takeaways from Semtech’s conference call:

• Record Q2 results included revenue of $342 million, up 33% year over year, and adjusted EPS of $0.71, up 73%, with operating leverage exceeding revenue growth.
• Management expects Q3 revenue of $410 million at the midpoint, up 54% year over year, driven by a projected 45% sequential increase in data-center revenue as 1.6T CopperEdge and FiberEdge ramp.
• Data-center demand and backlog remain exceptionally strong, with 800G continuing to grow and 1.6T products expected to represent more than half of data-center revenue in Q3; management said more than 70% of next fiscal year’s target revenue is already booked.
• LoRa revenue reached a record $58 million in Q2, up 58% year over year, and is expected to rise another 15% sequentially in Q3, supported by LoRaWAN, LoRa Plus, and Amazon Sidewalk expansion.
• Semtech is pursuing additional front-end and back-end manufacturing capacity for fiscal 2028 and beyond, while the planned cellular-module divestiture is expected to improve gross margin by more than 500 basis points and close in Q4.

Semtech Stock Up 5.5%

Semtech stock opened at $127.52 on Wednesday. The company’s 50-day moving average price is $136.12 and its two-hundred day moving average price is $118.21. The company has a quick ratio of 1.62, a current ratio of 2.37 and a debt-to-equity ratio of 0.86. The stock has a market cap of $11.88 billion, a P/E ratio of -326.97 and a beta of 2.35. Semtech has a twelve month low of $53.62 and a twelve month high of $177.35.

Insider Activity at Semtech

In other news, CEO Hong Q. Hou sold 2,000 shares of the company’s stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $133.00, for a total value of $266,000.00. Following the transaction, the chief executive officer owned 64,799 shares of the company’s stock, valued at approximately $8,618,267. This represents a 2.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Mark Lin sold 970 shares of the stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $150.41, for a total value of $145,897.70. Following the transaction, the chief financial officer owned 34,896 shares in the company, valued at approximately $5,248,707.36. This trade represents a 2.70% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 21,734 shares of company stock valued at $3,133,986. Insiders own 0.44% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the company. Corient Private Wealth LLC acquired a new stake in shares of Semtech during the fourth quarter worth $221,000. Pacer Advisors Inc. grew its stake in shares of Semtech by 38.8% in the fourth quarter. Pacer Advisors Inc. now owns 16,129 shares of the semiconductor company’s stock valued at $1,189,000 after acquiring an additional 4,509 shares in the last quarter. T. Rowe Price Investment Management Inc. grew its stake in shares of Semtech by 23.2% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 1,987,888 shares of the semiconductor company’s stock valued at $146,488,000 after acquiring an additional 374,548 shares in the last quarter. Invesco Ltd. increased its position in Semtech by 20.3% during the fourth quarter. Invesco Ltd. now owns 1,251,104 shares of the semiconductor company’s stock worth $92,194,000 after acquiring an additional 211,149 shares during the period. Finally, EP Wealth Advisors LLC bought a new position in Semtech during the fourth quarter worth about $514,000.

Analyst Upgrades and Downgrades

SMTC has been the subject of a number of analyst reports. Craig Hallum lifted their price objective on shares of Semtech from $105.00 to $205.00 and gave the company a “buy” rating in a research report on Wednesday, May 27th. TD Cowen raised their target price on shares of Semtech from $210.00 to $215.00 and gave the company a “buy” rating in a research note on Monday, June 22nd. Zacks Research cut Semtech from a “strong-buy” rating to a “hold” rating in a report on Friday, August 21st. Northland Securities downgraded Semtech from an “outperform” rating to a “market perform” rating in a research report on Tuesday, May 26th. Finally, BMO Capital Markets began coverage on Semtech in a research note on Thursday, August 20th. They issued an “outperform” rating and a $155.00 price objective on the stock. Fourteen analysts have rated the stock with a Buy rating, four have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $198.00.

Key Headlines Impacting Semtech

Here are the key news stories impacting Semtech this week:

• Positive Sentiment: Semtech reported second-quarter revenue of $341.9 million, up 32.7% year over year and ahead of the roughly $328.7 million consensus estimate. Adjusted earnings of $0.71 per share also topped estimates near $0.61–$0.62, compared with $0.41 a year earlier. Semtech Announces Second Quarter of Fiscal Year 2027 Results
• Positive Sentiment: Management’s fiscal third-quarter outlook was the major catalyst: revenue is forecast at approximately $405 million–$415 million (about $410 million midpoint), versus analyst expectations near $359 million, while adjusted EPS guidance of $1.02–$1.08 is well above the approximately $0.69 consensus. Semtech perks up as Q2 results, guidance top estimates
• Positive Sentiment: The quarter showed improving operating momentum, including record sales, stronger operating income, healthy gross margins and positive free cash flow. Investor attention is also focused on potential AI-related demand, including the ramp of next-generation 1.6-terabit networking products and constrained gallium nitride capacity. Will Semtech’s Q2 Earnings Tonight Send Its Stock Higher?
• Neutral Sentiment: Management continues to highlight LoRa growth and a broader shift toward AI data-center infrastructure and connected IoT applications, but the durability of these trends will depend on customer adoption and execution. Semtech: Is a Bigger Business Shift Taking Shape?
• Negative Sentiment: Recent insider-trading data showed multiple executives selling shares and no reported insider purchases over the past six months. These transactions may create a modest sentiment overhang, although they do not offset the strong earnings and guidance surprise. Semtech Posts Record $341.9 Million Sales in Fiscal Q2

Semtech Company Profile

Semtech Corporation is a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms. The company’s products address a broad range of applications in the Internet of Things (IoT), data center and telecom, industrial, home automation, automotive, and aerospace markets. Semtech’s portfolio includes power management, signal integrity, protection devices, wireless and sensing technologies that enable smarter, more connected systems worldwide.

A core offering from Semtech is its LoRa® technology, a low-power, long-range wireless communication platform that has become a de facto standard for global IoT deployments.