NasdaqGS:SMTC

Stock Analysis Report

Executive Summary

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms.

Rewards

Earnings are forecast to grow 38.25% per year

Earnings grew by 2.4% over the past year

Risk Analysis

No risks detected for SMTC from our risk checks.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Semtech's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SMTC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.6%

SMTC

-1.0%

US Semiconductor

0.06%

US Market


1 Year Return

-10.1%

SMTC

38.8%

US Semiconductor

19.4%

US Market

Return vs Industry: SMTC underperformed the US Semiconductor industry which returned 38.8% over the past year.

Return vs Market: SMTC underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

SMTCIndustryMarket
7 Day-5.6%-1.0%0.06%
30 Day-11.1%3.1%1.1%
90 Day0.4%14.9%8.9%
1 Year-10.1%-10.1%41.4%38.8%21.9%19.4%
3 Year36.1%36.1%91.3%81.0%48.9%39.3%
5 Year72.9%72.9%154.4%130.0%71.9%53.1%

Price Volatility Vs. Market

How volatile is Semtech's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Semtech undervalued compared to its fair value and its price relative to the market?

65.16x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SMTC ($48.87) is trading above our estimate of fair value ($39.94)

Significantly Below Fair Value: SMTC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SMTC is poor value based on its PE Ratio (65.2x) compared to the Semiconductor industry average (35.4x).

PE vs Market: SMTC is poor value based on its PE Ratio (65.2x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: SMTC is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: SMTC is overvalued based on its PB Ratio (4.7x) compared to the US Semiconductor industry average (3.1x).


Next Steps

Future Growth

How is Semtech forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

38.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SMTC's forecast earnings growth (38.2% per year) is above the savings rate (1.7%).

Earnings vs Market: SMTC's earnings (38.2% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SMTC's revenue (9.1% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: SMTC's revenue (9.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SMTC's Return on Equity is forecast to be low in 3 years time (19.7%).


Next Steps

Past Performance

How has Semtech performed over the past 5 years?

43.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SMTC has high quality earnings.

Growing Profit Margin: SMTC's current net profit margins (8.7%) are higher than last year (8%).


Past Earnings Growth Analysis

Earnings Trend: SMTC has become profitable over the past 5 years, growing earnings by 43% per year.

Accelerating Growth: SMTC's earnings growth over the past year (2.4%) is below its 5-year average (43% per year).

Earnings vs Industry: SMTC earnings growth over the past year (2.4%) exceeded the Semiconductor industry -27.7%.


Return on Equity

High ROE: SMTC's Return on Equity (7.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Semtech's financial position?


Financial Position Analysis

Short Term Liabilities: SMTC's short term assets ($440.0M) exceed its short term liabilities ($101.1M).

Long Term Liabilities: SMTC's short term assets ($440.0M) exceed its long term liabilities ($249.0M).


Debt to Equity History and Analysis

Debt Level: SMTC's debt to equity ratio (28.7%) is considered satisfactory.

Reducing Debt: SMTC's debt to equity ratio has reduced from 45.2% to 28.7% over the past 5 years.

Debt Coverage: SMTC's debt is well covered by operating cash flow (61.1%).

Interest Coverage: SMTC's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: SMTC has a low level of unsold assets or inventory.

Debt Coverage by Assets: SMTC's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

What is Semtech's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate SMTC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SMTC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SMTC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SMTC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SMTC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

Mohan Maheswaran (55yo)

13.8yrs

Tenure

US$6,170,479

Compensation

Mr. Mohan R. Maheswaran has been the Chief Executive Officer and President of Semtech Corporation since joining on April 3, 2006. Mr. Maheswaran served as General Manager of Analog Signal Processing Produc ...


CEO Compensation Analysis

Compensation vs Market: Mohan's total compensation ($USD6.17M) is about average for companies of similar size in the US market ($USD4.89M).

Compensation vs Earnings: Mohan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mohan Maheswaran
President13.8yrsUS$6.17m0.23% $7.6m
Emeka Chukwu
Executive VP & CFO13.3yrsUS$2.06m0.15% $4.9m
Asaf Silberstein
Executive Vice President of Worldwide Operations & Information Technology3.3yrsUS$1.62m0.076% $2.6m
James Kim
Executive Vice President of Worldwide Sales10.3yrsUS$1.79m0.050% $1.7m
Christopher Chang
Senior Vice President of Corporate Marketing & Business Development2.1yrsUS$1.76m0.0076% $252.2k
Nicolas Sornin
CTO & VP of Architect1.1yrsno datano data
William Harrison
Director of Investor Relations0yrsno datano data
Charles Ammann
Executive VP6.1yrsUS$1.48m0.022% $724.8k
Sharon Faltemier
Senior Vice President of Human Resources6yrsno data0.041% $1.4m
J. Wilson
Executive VP & Chief Quality Officer12.7yrsUS$675.84k0.12% $4.1m

6.1yrs

Average Tenure

59yo

Average Age

Experienced Management: SMTC's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mohan Maheswaran
President13.8yrsUS$6.17m0.23% $7.6m
Bruce Edwards
Independent Director13.3yrsUS$214.95k0.077% $2.6m
Rockell Hankin
Independent Chairman of the Board13.5yrsUS$254.95k0.22% $7.3m
James Burra
Independent Vice Chairman12.7yrsUS$209.95k0.097% $3.2m
Carmelo Santoro
Independent Director6.8yrsUS$204.95k0.029% $966.6k
James Lindstrom
Independent Director17.2yrsUS$214.95k0.032% $1.1m
Saar Gillai
Independent Director1.4yrsUS$139.78k0.0014% $46.4k
Rodolpho Cardenuto
Independent Director1.4yrsUS$139.78k0.0014% $46.4k
Ye Li
Independent Director4yrsUS$204.95k0.0058% $192.4k
Sylvia Summers
Independent Director6.8yrsUS$209.95k0.060% $2.0m

9.8yrs

Average Tenure

65.5yo

Average Age

Experienced Board: SMTC's board of directors are considered experienced (9.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SMTC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Semtech Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Semtech Corporation
  • Ticker: SMTC
  • Exchange: NasdaqGS
  • Founded: 1960
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$3.340b
  • Shares outstanding: 66.25m
  • Website: https://www.semtech.com

Number of Employees


Location

  • Semtech Corporation
  • 200 Flynn Road
  • Camarillo
  • California
  • 93012
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SMTCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1972
SM2DB (Deutsche Boerse AG)YesCommon StockDEEURAug 1972
SM2BRSE (Berne Stock Exchange)YesCommon StockCHCHFAug 1972
SMTC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 1972

Biography

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, and communications applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. It also offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and wireless and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products used in industrial and consumer applications. In addition, the company provides power products consisting of switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging that control, alter, regulate, and condition the power within electronic systems. It serves original equipment manufacturers and their suppliers in the enterprise computing, communications, and consumer and industrial end-markets. The company sells its products directly, as well as through independent sales representative firms and independent distributors in the United States, Europe, and Asia. Semtech Corporation was founded in 1960 and is headquartered in Camarillo, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:09
End of Day Share Price2020/02/18 00:00
Earnings2019/10/27
Annual Earnings2019/01/27


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.