Semtech Corporation (NASDAQ:SMTC) Released Earnings Last Week And Analysts Lifted Their Price Target To US$52.30

It's been a mediocre week for Semtech Corporation (NASDAQ:SMTC) shareholders, with the stock dropping 20% to US$31.18 in the week since its latest first-quarter results. The results don't look great, especially considering that statutory losses grew 54% toUS$0.36 per share. Revenues of US$206m did beat expectations by 3.0%, but it looks like a bit of a cold comfort. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Semtech

Following the latest results, Semtech's eleven analysts are now forecasting revenues of US$886.7m in 2025. This would be a credible 5.8% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 97% to US$0.58. Before this earnings announcement, the analysts had been modelling revenues of US$875.0m and losses of US$0.34 per share in 2025. So it's pretty clear the analysts have mixed opinions on Semtech even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.

Although the analysts are now forecasting higher losses, the average price target rose 21% to 43.35, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Semtech analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$45.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Semtech'shistorical trends, as the 7.8% annualised revenue growth to the end of 2025 is roughly in line with the 9.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that Semtech is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Semtech's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Semtech going out to 2026, and you can see them free on our platform here..

Even so, be aware that Semtech is showing 2 warning signs in our investment analysis , you should know about...

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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.