Investors in Semtech (NASDAQ:SMTC) from three years ago are still down 41%, even after 8.6% gain this past week

Semtech Corporation (NASDAQ:SMTC) shareholders should be happy to see the share price up 21% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 41% in the last three years, falling well short of the market return.

While the stock has risen 8.6% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Semtech

Because Semtech made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over three years, Semtech grew revenue at 8.4% per year. That's a pretty good rate of top-line growth. Shareholders have seen the share price fall at 12% per year, for three years. This implies the market had higher expectations of Semtech. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Semtech stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Semtech's TSR for the year was broadly in line with the market average, at 26%. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 5%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Semtech. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Semtech is showing 2 warning signs in our investment analysis , you should know about...

Semtech is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com