The time has not yet come to remove your chips from the table: Semtech Corporation (SMTC)

Semtech Corporation (NASDAQ: SMTC) stock fell -3.04% on Tuesday to $32.48 against a previous-day closing price of $33.50. With 0.64 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.25 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $33.68 whereas the lowest price it dropped to was $32.46. The 52-week range on SMTC shows that it touched its highest point at $75.61 and its lowest point at $25.29 during that stretch. It currently has a 1-year price target of $42.50. Beta for the stock currently stands at 1.68.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SMTC was up-trending over the past week, with a rise of 1.79%, but this was up by 17.68% over a month. Three-month performance surged to 21.74% while six-month performance fell -43.67%. The stock lost -55.73% in the past year, while it has gained 13.21% so far this year. A look at the trailing 12-month EPS for SMTC yields 2.29 with Next year EPS estimates of 2.26. For the next quarter, that number is 0.48. This implies an EPS growth rate of 111.40% for this year and -19.27% for next year. EPS is expected to grow by 11.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 18.30%.

Float and Shares Shorts:

At present, 63.76 million SMTC shares are outstanding with a float of 63.14 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.22 million, which was 6.64% higher than short shares on Sep 14, 2022. In addition to Mr. Mohan R. Maheswaran as the firm’s Pres, CEO & Director, Mr. Emeka N. Chukwu serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 98.44% of SMTC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 50.54% of SMTC, in contrast to 5.54% held by mutual funds. Shares owned by individuals account for 48.74%. As the largest shareholder in SMTC with 10.93% of the stake, BlackRock Fund Advisors holds 6,974,787 shares worth 6,974,787. A second-largest stockholder of SMTC, The Vanguard Group, Inc., holds 6,383,576 shares, controlling over 10.00% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in SMTC, holding 2,972,853 shares or 4.66% stake. With a 3.32% stake in SMTC, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 2,120,333 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.02% of SMTC stock, is the second-largest Mutual Fund holder. It holds 1,929,162 shares valued at 55.35 million. Vanguard Small Cap Index Fund holds 2.56% of the stake in SMTC, owning 1,636,666 shares worth 46.96 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SMTC since 10 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SMTC analysts setting a high price target of $63.00 and a low target of $32.00, the average target price over the next 12 months is $41.71. Based on these targets, SMTC could surge 93.97% to reach the target high and fall by -1.48% to reach the target low. Reaching the average price target will result in a growth of 28.42% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SMTC will report FY 2023 earnings on 03/15/2023. Analysts have provided yearly estimates in a range of $2.83 being high and $2.79 being low. For SMTC, this leads to a yearly average estimate of $2.80. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Semtech Corporation surprised analysts by $0.02 when it reported $0.65 EPS against a consensus estimate of $0.63. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is $0.51 and the low estimate is $0.47. The average estimate for the next quarter is thus $0.48.

Summary of Insider Activity:

Insiders traded SMTC stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 6,250 shares were bought while 1,959 shares were sold. The number of buy transactions has increased to 52 while that of sell transactions has risen to 42 over the past year. The total number of shares bought during that period was 156,878 while 100,803 shares were sold.

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