Zacks Investment Research Downgrades Semtech (SMTC) to Sell

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Zacks Investment Research downgraded shares of Semtech (NASDAQ:SMTC) from a hold rating to a sell rating in a research report report published on Monday.

According to Zacks, “Semtech continues to be impacted by mounting competition in the semiconductor space. The resultant pricing pressure continues to impact the company’s margins and profitability. Moreover, the seasonality in the consumer segment is a matter of concern. Also, risk of foreign exchange fluctuations is a headwind. However, the company reported strong fiscal third quarter results. The growth drivers for the company were product differentiation, operational flexibility and a specific focus on fast-growing segments and regions. Further, Semtech's strong performance in the industrial and communications markets continues to drive its top-line growth. Notably, shares of Semtech have outperformed the industry it belongs to on a year-to-date basis.”

Several other brokerages have also issued reports on SMTC. Piper Jaffray Companies increased their target price on shares of Semtech from $57.00 to $63.00 and gave the stock an overweight rating in a research note on Monday, September 10th. BidaskClub raised shares of Semtech from a sell rating to a hold rating in a research note on Wednesday, November 28th. Stifel Nicolaus upped their price objective on shares of Semtech from $60.00 to $64.00 and gave the stock a buy rating in a report on Thursday, August 30th. ValuEngine downgraded shares of Semtech from a strong-buy rating to a buy rating in a report on Wednesday, October 24th. Finally, Needham & Company LLC downgraded shares of Semtech from a buy rating to a hold rating and set a $42.00 price objective on the stock. in a report on Tuesday, September 4th. One analyst has rated the stock with a sell rating, two have given a hold rating and ten have assigned a buy rating to the company’s stock. The company presently has a consensus rating of Buy and an average target price of $60.40.

Shares of NASDAQ SMTC opened at $50.55 on Monday. The firm has a market cap of $3.29 billion, a P/E ratio of 36.11, a P/E/G ratio of 2.55 and a beta of 1.75. Semtech has a 12-month low of $31.30 and a 12-month high of $60.55. The company has a debt-to-equity ratio of 0.28, a quick ratio of 3.53 and a current ratio of 4.03.

Semtech (NASDAQ:SMTC) last issued its earnings results on Wednesday, November 28th. The semiconductor company reported $0.63 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.61 by $0.02. The business had revenue of $173.60 million for the quarter, compared to analyst estimates of $173.06 million. Semtech had a net margin of 7.97% and a return on equity of 14.23%. Semtech’s revenue was up 15.5% on a year-over-year basis. During the same period in the prior year, the firm earned $0.54 earnings per share. Equities research analysts predict that Semtech will post 1.57 earnings per share for the current fiscal year.

In other Semtech news, VP Marc Pegulu sold 2,000 shares of the company’s stock in a transaction on Tuesday, September 11th. The shares were sold at an average price of $58.00, for a total transaction of $116,000.00. Following the transaction, the vice president now owns 16,068 shares in the company, valued at $931,944. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, CFO Emeka Chukwu sold 1,100 shares of the company’s stock in a transaction on Wednesday, September 12th. The stock was sold at an average price of $58.23, for a total transaction of $64,053.00. Following the transaction, the chief financial officer now owns 89,330 shares in the company, valued at approximately $5,201,685.90. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 79,995 shares of company stock worth $4,290,572. Corporate insiders own 2.30% of the company’s stock.

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Bank of Montreal Can purchased a new stake in shares of Semtech in the second quarter valued at about $124,000. Meeder Asset Management Inc. purchased a new stake in shares of Semtech in the third quarter valued at about $155,000. NumerixS Investment Technologies Inc purchased a new stake in shares of Semtech in the second quarter valued at about $160,000. Glenmede Trust Co. NA raised its holdings in shares of Semtech by 237.0% in the third quarter. Glenmede Trust Co. NA now owns 3,822 shares of the semiconductor company’s stock valued at $211,000 after purchasing an additional 2,688 shares during the last quarter. Finally, HPM Partners LLC purchased a new stake in shares of Semtech in the third quarter valued at about $214,000. Hedge funds and other institutional investors own 98.97% of the company’s stock.

Semtech Company Profile

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms. The company provides signal integrity products, including a portfolio of optical data communications and video transport products used in various enterprise computing, industrial, communications, and high-end consumer applications; and a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications.

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