Semtech (SMTC) Boosts FiberEdge Portfolio With New Chipsets
Semtech Corporation SMTC expanded its portfolio of PAM4 Transimpedance Amplifiers and Linear Laser Drivers with the announcement regarding the production availability of FiberEdge GN1816 and GN1848 chipsets.
Notably, the newly launched chipsets bring high linearity and low noise, making them ideal for high-speed short-reach interconnects, re-timed linear drive, and active optical cable (AOC) applications.
Further, these low-power and low-cost chipsets are designed for 400GBASE-SR4/VR4 and 800GBASE-SR8/VR8 PAM4 multi-mode optical transceivers and AOCs.
We believe Semtech is likely to gain strong traction across short-reach 400G and 800G data center applications on the back of GN1816 and GN1848.
Further, the latest move has added strength to the company’s FiberEdge portfolio.
Semtech Corporation Price and Consensus
Semtech Corporation price-consensus-chart | Semtech Corporation Quote
Growth Prospects
The latest move bodes well for the company’s efforts to penetrate into the 100G per lane multi-mode fiber market rapidly. Moreover, the move will likely strengthen its footprint in the global fiber optics market.
Per a Grand View Research report, the global fiber optics market is expected to grow at a CAGR of 6.9% during the forecast period of 2023-2030.
A Markets and Markets report suggests that the global fiber optics market size will reach $8.2 billion by 2027, witnessing a CAGR of 10.9% between 2022 and 2027.
We believe that the growing prospects of Semtech in the multi-mode fiber market will bolster the company’s Signal Integrity segment.
Expanding Portfolio
We also note that the company’s latest offering adds strength to the company’s overall product portfolio.
Recently, Semtech has introduced a new relay feature to its LoRa Basics Modem v4 device, enabling customers to install battery-operated, user-friendly relay nodes as network extenders.
This apart, Semtech expanded its PerSe product portfolio with the launch of a new purpose-built integrated circuit, enabling 5G mobile devices to implement advanced radio frequency control.
We believe that the abovementioned endeavors will likely benefit the company’s overall financial performance in the days ahead, which, in turn, will instill investor optimism in the stock.
For second-quarter fiscal 2024, management expects net sales to be $233-$243 million. The Zacks Consensus Estimate for the same is pegged at $237.06 million, suggesting year-over-year growth of 13.3%.
However, macroeconomic headwinds, including supply-chain constraints and a weak demand environment, are major concerns.
Semtech shares have declined 11.6% on a year-to-date basis, underperforming the industry’s growth of 23.7%.
Zacks Rank & Stocks to Consider
Currently, Semtech carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Asure Software ASUR, Arista Networks ANET and Salesforce CRM. While Asure Software sports a Zacks Rank #1 (Strong Buy), Arista Networks and Salesforce carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure Software shares have gained 29% in the year-to-date period. ASUR’s long-term earnings growth rate is currently projected at 27%.
Arista Networks shares have gained 62.7% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.75%
Salesforce shares have gained 64.9% in the year-to-date period. CRM’s long-term earnings growth rate is currently projected at 22.47%.
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