Piper Sandler maintains Semtech stock with $55 target

On Wednesday, Piper Sandler kept a positive outlook on Semtech Corporation (NASDAQ:SMTC), reiterating an Overweight rating and a $55.00 price target. According to InvestingPro data, the stock has shown strong momentum with a notable recovery from its 52-week low of $24.05, though it remains significantly below its peak of $79.52. The company’s current market capitalization stands at $3.36 billion. Semtech, a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms, reported a quarter that surpassed expectations, with guidance that also edged above estimates for both revenue and earnings.

The company’s performance in the data center sector was particularly strong, showing growth even with the absence of accelerated large-scale projects. This growth came despite a gap left by a significant customer in the Analog Control Circuit ( ACC (NSE:ACC)) segment. The company maintains a healthy financial position with a current ratio of 2.07, indicating strong liquidity to meet short-term obligations. Revenue growth reached 4.67% in the last twelve months, with total revenue of $909.29 million. Semtech’s management is confident that the data center segment will continue to expand in each quarter of the fiscal year 2026, with several design wins for ACC expected to contribute to revenues in the fourth quarter of 2026.

In addition to the data center success, Semtech is poised to benefit from its Laser Proximity Optical (LPO) technology, which is anticipated to start generating revenue in the second half of calendar year 2025. The Internet of Things (IoT) segment is also seeing positive momentum, as Semtech capitalizes on market shifts caused by the withdrawal of a European competitor and the ban of a Taiwanese competitor. The company’s backlog has been growing, indicating strong demand for its IoT solutions.

Piper Sandler’s analysis highlights Semtech’s solid quarterly results and the potential for continued progress across its business segments. The firm’s endorsement of the company’s strategy and market positioning supports the maintained Overweight rating, suggesting confidence in Semtech’s future performance. InvestingPro analysis reveals that while the company wasn’t profitable in the last twelve months, analysts expect positive earnings in the coming year. For deeper insights into Semtech’s financial health and growth prospects, including 10+ additional ProTips and comprehensive valuation metrics, explore the full Pro Research Report available on InvestingPro.

In other recent news, Semtech Corporation has reported its financial results for the first quarter of fiscal year 2026, showcasing a robust performance. The company exceeded earnings per share (EPS) forecasts with an adjusted EPS of $0.38, surpassing the expected $0.37, and achieved revenue of $251.1 million, slightly above the anticipated $250.09 million. Analysts from Stifel have raised their price target for Semtech to $45, maintaining a Buy rating, following the company’s first-quarter results and guidance for the second quarter, which showed slight improvements over previous estimates. Needham also reaffirmed a Buy rating with a $54 price target, emphasizing Semtech’s strong performance in data center-related products. Susquehanna maintained a Positive rating with a $60 price target, highlighting growth potential in several product areas despite near-term challenges. The company is seeing significant interest in its CopperEdge™ products, which offer improved reach and speed, and continues to make strides in LoRa technology applications. Furthermore, Semtech’s management remains committed to debt reduction, having prepaid $25 million of term loan principal by July, resulting in an adjusted net leverage ratio below 2. These developments reflect Semtech’s strategic focus on infrastructure growth and product innovation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.