Trump announces trade deal with EU following months of negotiations
On Friday, Stifel analysts revised their outlook on Semtech Corp . (NASDAQ:SMTC), currently trading at $35.63, lowering the 12-month price target to $54 from $60 while maintaining a Buy rating. According to InvestingPro data, the stock has shown significant price volatility, with a 52-week range of $21.56 to $79.52. The adjustment follows Semtech’s fourth quarter fiscal year 2025 results, which were solid, with revenue reaching $251.0 million, a 6.0% increase quarter over quarter, and non-GAAP earnings per share (EPS) of $0.40. This EPS was $0.08 higher than both Stifel’s and the Street’s estimate of $0.32, driven by higher sales, improved margins, and reduced interest expenses. The company maintains a healthy gross profit margin of 51.2% and has demonstrated year-over-year revenue growth of 4.67%.
Despite the positive performance in the last quarter, the company’s first quarter fiscal year 2026 outlook is slightly subdued. Semtech is guiding for $250.0 million in revenue at the midpoint, a marginal 0.4% decrease quarter over quarter. Analysts had anticipated this modest downturn due to what they describe as an "air pocket" with Semtech’s CopperEdge anchor customer. InvestingPro analysis reveals that while the company isn’t currently profitable, analysts expect a return to profitability this fiscal year, with an EPS forecast of $0.67 for FY2026.
Stifel remains optimistic about Semtech’s near-term (NT) financial profile and its long-term (LT) prospects, citing the company’s continuous efforts to strengthen its financial position. The company’s management has been proactive in aligning research and development (R&D) and capital expenditures with their core products and high-growth end markets. This strategic focus is expected to support Semtech’s market share expansion in future quarters.
The firm’s analysts believe that despite the slight decrease in the company’s revenue outlook for the upcoming quarter, Semtech’s commitment to its product strategy and the secular tailwinds supporting its business provide a strong foundation for growth. The revised price target of $54 reflects a multiple of 4.5 times the projected calendar year 2026 enterprise value to sales (EV/Sales), adjusted for lower comparative figures. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, with analyst price targets ranging from $50 to $82. Subscribers can access the comprehensive Pro Research Report for deeper insights into Semtech’s valuation and growth prospects.
In other recent news, Semtech Corporation reported its fourth-quarter earnings for fiscal year 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.40, exceeding the forecasted $0.33, and reported revenue of $251 million, slightly above the expected $250.18 million. Semtech also highlighted a 205% year-over-year growth in revenue from its LoRa technology. Additionally, the company managed to reduce its net debt by 68% to $411 million, reflecting strong financial management. Looking ahead, Semtech projects Q1 net sales of $250 million and an adjusted EPS of $0.37 ± $0.03. In terms of analyst activity, Piper Sandler’s Harsh Kumar noted the company’s robust balance sheet improvements. The company continues to focus on strategic R&D investments and expects growth in data center and LoRa technologies. These recent developments indicate a positive trajectory for Semtech’s financial performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.