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Semtech (SMTC) to Report Q1 Earnings: What's in the Cards?

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Semtech Corporation SMTC is scheduled to report first-quarter fiscal 2022 results on Jun 2.

For the first quarter, the company expects net sales in the range of $164-$172 million. The Zacks Consensus Estimate for sales is pegged at $167.9 million, indicating an improvement of 26.5% from the year-ago reported value.

Further, it anticipates non-GAAP earnings per share in the range of 49-55 cents. The consensus mark for earnings per share is pegged at 52 cents, indicating a 48.6% rise from the previous-year reported figure.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 5.1%.

Semtech Corporation Price and EPS Surprise

Semtech Corporation Price and EPS Surprise
Semtech Corporation Price and EPS Surprise

Semtech Corporation price-eps-surprise | Semtech Corporation Quote

Key Factors to Note

Semtech’s persistent efforts to expand the product portfolio aided by strategic alliances are anticipated to have benefited fiscal first-quarter results.

During the first quarter, the company introduced GN2256, the newest product in the Tri-EdgeTMCDR portfolio, to expand 5G wireless front haul. This is likely to have aided its quarterly performance,

In addition, Cypress Technology integrated Semtech’s AVX for its new line of high-quality point-to-point AV extenders.

These recent endeavours are likely to get reflected in the upcoming quarterly results.

Moreover, the low power, high range (LoRa) business is likely to have supported Semtech’s performance in the to-be-reported quarter. As LoRa technology is cost effective, Semtech signed a number of deals that are expected to have expanded the adoption of LoRa devices.

In this regard, it is to be noted that its LoRa devices and LoRaWAN protocol have been incorporated by Vision Metering in its smart electric meters and meter interface units for water and gas meters across the United States as well as Latin America.

Also, DevApp Tech Solutions integrated the company’s LoRa devices and LoRaWAN protocol into its smart asset tracking solutions.

Moreover, WITRAC incorporated the company’s LoRaWAN protocol and LoRa 2.4GHz in its global track and trace platform to help customers gain full control and traceability of assets in the supply chain.

These efforts are likely to have driven top-line growth of the company in the fiscal first quarter.

However, weak global demand environment, unfavourable foreign exchange and new product expenses might reflect on Semtech’s upcoming results. Also, the company’s soft demand from the infrastructure end market and macro headwinds in China may have been concerns.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Semtech this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Semtech has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stock to Consider

Here are some stocks that you may consider as our model shows that it has the right combination of elements to beat on earnings this season.

Advanced Micro devices, Inc. AMD has an Earnings ESP of +0.94% and a Zacks Rank of 2, at present.

Generac Holdings Inc. GNRC has an Earnings ESP of +1.00% and a Zacks Rank of 2, at present.

Apple AAPL has an Earnings ESP of +1.97% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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