Overview page represent trading in all U.S. Indexes: Index quotes may be real-time or delayed as per exchange requirements refer to time stamps for information on any delays. Copyright 2019© FactSet Research Systems Inc. Fundamental company data and analyst estimates provided by FactSet. International stock quotes are delayed as per exchange requirements. stock quotes reflect trades reported through Nasdaq only comprehensive quotes and volume reflect trading in all markets and are delayed at least 15 minutes. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.Stocks: Real-time U.S. When our analyst team has a stock tip, it can pay to listen. For most investors, I believe this small chip stock should be observed from the sidelines for now, until there's a clearer signal that the company can survive and thrive over the long term. However, this looks like a highly risky and only potentially high-reward investment at this juncture. Perhaps Semtech could rocket higher once there's an indication the worst is in the rearview mirror. After all, with sales down so much in recent quarters since the Sierra Wireless merger, an eventual up cycle (which is already taking hold in some areas of the semiconductor industry, like in smartphone and PC sales) could be right around the corner. Some small-cap stock investors might be eyeing this too, and mulling an addition of Semtech to a diversified basket of small-caps with this as an underlying expectation. If Semtech can stem its losses and hold out for a rebound in chip sales, perhaps there's massive upside from here. Shares currently trade for about 2.7 times enterprise value to trailing 12-month revenue, about half of how it was valued a few years ago. Understandably, the market has its doubts and has punished the stock, given its current money-losing business and high burden of debt. Semtech could thus be a turnaround story at some point. Semtech's IoT chip business is exposed to some markets that should eventually recover, and that could overall be big growth opportunities in the decade ahead. That's also not a great look in a higher interest rate environment, but unfortunately, it's what the business needs right now.Ī high-risk, only potentially high-reward stock In October, management noted it sold another $250 million of convertible debt to help fund operations. The company's profit margins have turned deeply negative, with free cash flow and GAAP net losses dialing in at negative $137 million and negative $440 million, respectively, over the last reported 12-month period.Īt the end of July, Semtech reported cash and short-term investments of $148 million, and total debt of $1.86 billion. With Semtech's chip and IoT markets suddenly in a downturn, cost-cutting can't happen soon enough. It did "nearly double Semtech's revenue," but the rationale for the tie-up was rapid cost-cutting initiatives within 12 to 18 months, with that newly formed merger revenue as a base. Add that to Semtech's $178 million in revenue in Q3 last year (for a total of $344 million), and suddenly that as-high-as-$210-million outlook doesn't look so hot.Īs for the cost of acquiring Sierra Wireless, Semtech paid an enterprise value of $1.2 billion. Sierra Wireless' Q3 calendar year 2023 revenue (which corresponds to the Q3 fiscal year 2024 for Semtech) was $166 million. Semtech acquired fellow IoT company Sierra Wireless at the start of 2023. And for the third quarter, management said revenue could be as high as $210 million, up from $178 million the year prior. In second-quarter fiscal 2024 (the three months ended in July 2023), Semtech reported revenue of $238 million, up from $209 million the year prior. On the surface, it seems like Semtech is bucking the current and mounting down-cycle for industrial and communications chips. Currently, the company broadly organizes its business into three sections: Infrastructure (cloud data center, 5G and other wireless network equipment, broadband internet equipment), Industrial (sensors for manufacturing machinery, factory automation, automotive chips, video chips), and High-end Consumer (connectivity chips for PCs, smartphones, other consumer electronics). Semtech is a chip designer and components assembler for IoT systems, and also has some software that helps customers manage their networks of IoT devices.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |