What Happened:
Shares of semiconductor designer Lattice Semiconductor (NASDAQ:LSCC) jumped 5% in the morning session after Stifel analyst Ruben Roy upgraded the stock's rating from Hold to Buy and assigned a price target of $55. The analyst's upgrade and comments echoed the market's improved sentiment following the appointment of Dr. Ford Tamer as Lattice's CEO. Roy was also constructive on the near-term demand picture, adding, "We expect modest sequential growth to continue into the December quarter. With what looks to be the worst of the current downturn behind us and with recent share price underperformance appearing to reflect reset expectations." After the initial pop the shares cooled down to $51.61, up 2.5% from previous close.
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What is the market telling us:
Lattice Semiconductor’s shares are quite volatile and over the last year have had 23 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was a day ago, when the stock gained 12.7% on the news that the company announced the appointment of Dr. Ford Tamer as Chief Executive Officer. Tamer replaced Esam Elashmawi, who had served as Interim CEO since June 2024. Elashmawi will continue in his role as Chief Strategy and Marketing Officer.
Tamer adds extensive experience and expertise in semiconductors, networking, and enterprise software. He was President and CEO of Inphi for over nine years; before that, he held leadership roles at Telegent Systems and Broadcom's Infrastructure Networking Group. Further solidifying his pedigree, Tamer holds advanced degrees from MIT.
Lastly, the company reaffirmed its guidance on July 29, 2024, suggesting that there won't be major surprises when it reports earnings for the quarter. This further confirms that the company was able to manage the transition in leadership efficiently.
Overall, the market seems to be supportive of the move, given Tamer's solid bio and his appointment, which not only addresses the leadership gap but also brings a sense of stability and direction.
Lattice Semiconductor is down 24.6% since the beginning of the year, and at $51.61 per share it is trading 40.6% below its 52-week high of $86.84 from September 2023. Investors who bought $1,000 worth of Lattice Semiconductor’s shares 5 years ago would now be looking at an investment worth $2,439.
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