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Semtech's (SMTC) New Deal Boosts LoRa Technology Adoption

Semtech Corporation SMTC is winning partnerships on the back of robust LoRa solutions.

This is evident from the recent selection of LoRa-enabled sensors and LoRaWAN-based gateways by Sustainable Hrvest Sdn Bhd. This reflects the efficiency and reliability of Semtech’s LoRa technology.

Further, it boosts adoption as well as the customer base of its LoRa technology.

Notably, Sustainable Hrvest Sdn Bhd has deployed LoRa sensors and LoRaWAN gateways across its Durian fruit farms in Malaysia.

The sensors provide farmers with real-time data on the health of their farms at every stage of the growth cycle, from pre-harvest to post-harvest, allowing for more efficient and productive farming practices, reduced operational costs and increased crop yields.

The LoRa chipsets connect sensors to the cloud and enable real-time communication of data and analytics, helping to enhance the efficiency and productivity of sustainable IoT use cases.

There are currently 30 LoRa-powered farms in Malaysia, with new plantations expected to go live in the coming year.

Semtech Corporation Price and Consensus

Semtech Corporation Price and Consensus
Semtech Corporation Price and Consensus

Semtech Corporation price-consensus-chart | Semtech Corporation Quote

Growth Prospects

The company’s current move positions it well to capitalize on the growth prospects present in the global agriculture market.

Per a report from The Business Research Company, the underlined market is expected to hit $19,007.8 billion by 2027, witnessing a CAGR of 9.1% between 2023 and 2027.

A report from Research and Markets states that the global agriculture market is expected to grow to $18,814.21 billion at a CAGR of 10.7% between 2022 and 2026.

We believe that Semtech’s growing footprint in this promising market will help it win investors’ confidence in the days ahead.

Coming to the price performance, SMTC has declined 35.6% in the year-to-date period against the industry’s rise of 9.3%.

Portfolio Strength: Key Catalyst

Semtech’s constant efforts toward expanding its product portfolio are expected to continue aiding it in gaining momentum across new customers and sustaining the existing ones.

Recently, the company introduced the PerSe Connect SX9376 chipset, which enables RF performance optimization, improved connectivity and compliance with global specific absorption rate regulations for 5G-enabled consumer products.

Additionally, SMTC announced the release of the first LoRa-enabled third-party devices based on Amazon Sidewalk, which will raise demand for LoRa-enabled development kits and modules and reinforce Semtech's position as a leading technology provider for IoT connection.

Semtech also introduced a transceiver, namely LoRa Connect LR1121, which features low power consumption, the LoRaWAN standard, as well as global connectivity. It is ideal for use in Internet of Things (IoT) endpoints.

We note that expanding portfolio strength is expected to aid the company’s performance across the various end markets.

However, weak demand environments across the end markets are a major concern. Macroeconomic headwinds, including export restrictions, inflationary pressure and supply-chain constraints, remain overhangs for Semtech.

Zacks Rank and Stocks to Consider

Currently, Semtech carries a Zacks Rank #4 (Sell).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Agilent Technologies A, DigitalOcean DOCN and AMETEK AME. Agilent Technologies, DigitalOcean and AMETEK each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies shares have gained 9.2% in the past year. The Zacks Consensus Estimate for A’s second-quarter fiscal 2023 earnings is pegged at $1.27 per share, suggesting an increase of 12.4% from the prior-year quarter’s reported figure.

DigitalOcean shares have risen 2.2% in the past year. The Zacks Consensus Estimate for DOCN’s second-quarter earnings is pegged at 38 cents per share, suggesting a jump from 20 cents per share reported in the prior-year quarter.

AMETEK shares have rallied 19.5% in the past year. The Zacks Consensus Estimate for AME’s second-quarter earnings is pegged at $1.50 per share, suggesting an increase of 8.7% from the prior-year quarter’s reported figure.

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