Why Lattice Semiconductor (LSCC) Stock Is Falling Today

Max Juang /
2023/10/31 11:42 am EDT

What Happened:

Shares of semiconductor designer Lattice Semiconductor (NASDAQ:LSCC) fell 13.7% in the morning session after the company reported third quarter results with revenue guidance for the next quarter roughly 10% below Wall Street's expectation before the quarter was reported. Lattice explained that the weak revenue forecast was due to reduced demand in communications infrastructure in Europe as well as industrial and automotive markets in Europe and Asia. While management believes in the long-term potential for their products, they cited high interest rates as a dampener to near-term demand. Management added on the earnings call that distributor and large end customer inventories remain healthy (high inventory levels could mean fewer future orders), but the market seems somewhat skeptical. The semiconductor industry has seen some choppy results this earnings season, starting with bellwether Texas Instruments and continuing with ON Semiconductor. 

On the other hand, revenue and EPS outperformed Wall Street's estimates, even if the beats weren't too big. Overall, the results could have been better.

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What is the market telling us:

Lattice Semiconductor's shares are very volatile and over the last year have had 21 moves greater than 5%. But moves this big are very rare even for Lattice Semiconductor and that is indicating to us that this news had a significant impact on the market's perception of the business.

Lattice Semiconductor is down 11.1% since the beginning of the year, and at $57.20 per share it is trading 41.2% below its 52-week high of $97.26 from August 2023. Investors who bought $1,000 worth of Lattice Semiconductor's shares 5 years ago would now be looking at an investment worth $9,480.

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