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On Wednesday, Semtech Corp . (NASDAQ:SMTC), currently trading at $38.78, maintained its Buy rating and $54.00 price target according to Needham analysts. The endorsement follows Semtech’s release of strong first-quarter fiscal year 2026 results and its guidance for the second quarter, which were buoyed by increased shipments for data center infrastructure and the adoption of LoRa-enabled solutions. According to InvestingPro data, analysts maintain a bullish consensus with price targets ranging from $43 to $68.
Semtech’s recent performance has been particularly strong in data center-related products, marking a record quarter for the company. While the stock has experienced a significant 39.6% decline over the past six months, the firm anticipates that this momentum will persist into the second half of fiscal year 2026, propelled by ongoing demand for its FiberEdge and non-NVIDIA CopperEdge products, as well as anticipated ramps in Low Power Optical (LPO) solutions. InvestingPro analysis reveals the company maintains healthy liquidity with a current ratio of 2.07, suggesting strong operational flexibility.
Despite the projection of a decline in LoRa-enabled solution sales in the second quarter of fiscal year 2026, due to a prior build-up by a medical customer in anticipation of a new product launch, Semtech is confident in maintaining a steady quarterly revenue run rate of $30-35 million for its LoRa technology.
In an effort to provide greater transparency, Semtech has begun disclosing segment gross margins in its press releases. The first quarter of fiscal year 2026 showcased a robust Semiconductor Product gross margin of nearly 64%. Needham’s price target is based on a slightly adjusted multiple of 28 times the firm’s fiscal year 2027/calendar year 2026 non-GAAP earnings per share estimate, which has been revised upward from $1.90 to $1.95.
In other recent news, Semtech Corporation reported its financial results for the first quarter of fiscal year 2026, surpassing earnings per share (EPS) forecasts. The company posted an adjusted EPS of $0.38, slightly above the forecast of $0.37, with revenue reaching $251.1 million, exceeding the expected $250.09 million. Despite these positive results, Stifel analysts raised their price target for Semtech shares to $45 from $42, maintaining a Buy rating. The analysts noted that Semtech’s first-quarter revenue and non-GAAP EPS were slightly above their expectations, with guidance for the second quarter also showing marginal improvements.
Stifel highlighted the continued momentum in infrastructure growth, despite a temporary setback in the analog communications components business. They anticipate an improvement in Semtech’s non-GAAP operating margins, projecting an increase from 16.4% in fiscal year 2025 to 18.9% in fiscal year 2026. Additionally, non-GAAP EPS growth is expected to outpace revenue growth by approximately two times in fiscal year 2027. Semtech’s CopperEdge products have garnered significant interest due to their capability to deliver longer reach lengths at higher speeds.
The company continues to focus on AI connectivity and LoRa technology, with guidance for Q2 2026 projecting net sales of $256 million, plus or minus $5 million. Semtech remains focused on margin expansion and strategic investments in research and development, positioning itself strongly in the connectivity solutions sector.
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