Semtech (SMTC) Reports Earnings Tomorrow. What To Expect

Radek Strnad /
2023/12/05 2:00 am EST

Semiconductor company Semtech (NASDAQ:SMTC) will be announcing earnings results tomorrow after market hours. Here's what you need to know.

Last quarter Semtech reported revenues of $238.4 million, up 13.9% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

Is Semtech buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Semtech's revenue to grow 12.9% year on year to $200.5 million, improving on the 8.9% year-over-year decline in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.15 per share.

Semtech Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2%.

Looking at Semtech's peers in the semiconductor manufacturing segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. FormFactor's revenues decreased 5.1% year on year, beating analyst estimates by 2.8% and Kulicke and Soffa reported revenue decline of 29.3% year on year, exceeding estimates by 1.1%. FormFactor traded flat on the results, and Kulicke and Soffa was down 6.6%.

Read our full analysis of FormFactor's results here and Kulicke and Soffa's results here.

There has been positive sentiment among investors in the semiconductor manufacturing segment, with the stocks up on average 9% over the last month. Semtech is up 17.7% during the same time, and is heading into the earnings with analyst price target of $32.7, compared to share price of $17.2.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.