Is Semtech Stock Overpriced? Here's Why Our Analysis Suggests It's Time to Sell #trendmyfriend
Semtech's Mixed Results: Is the Semiconductor Giant Losing its Edge?
Semtech Company SMTC 0.00%↑ develops, manufactures, and sells analogue and mixed-signal semiconductors and advanced algorithms. The Camarillo-based corporation was founded in 1960.
Signal integrity products include optical data communications and video transport products used in infrastructure and industrial applications; integrated circuits for data centres, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; video products for broadcast applications; and video-over-IP technology for professional audio videographers.
Protection products include filter and termination devices integrated with transient voltage suppressor devices to protect electronic systems from voltage spikes, and sensing products include a portfolio of specialised radio frequency products used in industrial, medical, and communications applications, as well as industrial and consumer applications. It also sells switching voltage regulators, combined switching and linear regulators, smart regulators, isolated switches, and wireless charging solutions.
The company serves OEMs and industrial end-markets. Throughout Asia-Pacific, North America, and Europe, it sells directly and through independent sales representatives and distributors.
Semtech's Q4 2023 Earnings Report: Revenue Beat Overshadowed by Significant GAAP Miss
Semtech Corporation, a leading supplier of analogue and mixed-signal semiconductors, reported its Q4 2023 earnings. Investors were mixed. Semtech met the market's consensus estimate for normalised EPS of $0.47, but GAAP EPS was -$0.80 instead of the expected -$1.10. Revenue of $167.51 million exceeded expectations by $16.05 million. Data centres, 5G infrastructure, and the Internet of Things drove Semtech's revenue growth (IoT). The company's GAAP earnings fell far short of expectations. Semtech's Q4 2023 earnings report was positive, but its significant GAAP earnings per share miss may worry investors. Semtech's mixed results may warrant short-term caution for semiconductor investors.
$SMTC : Technical Overview
The stock has just recently made a new 52 week low post Q4 earnings. The chart looks strong sell despite it being in oversold zone as this is the oversold opportunity we have been waiting for. The donchain channels suggest the stock has made a new 50 days low and has clearly broken all its support levels and a continues to deliver a sell signal for the stock on technical grounds. Lets have a fundamental valuation outlook here :
$SMTC : Valuation
** In USD Millions. Estimated based on calculations by Equisights
As seen above , we believe $SMTC still looks very much overrvalued and the risk-reward is highly favourable for the stock as it trades at $22.14 now. We have tried applying the EV/Sales of PPG to determine its terminal value and in turn derive at the stocks intrinsic valuation and have found it to be overvalued with significant downside at the disposal. To know the actionable trade idea;
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