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Semtech's (SMTC) LoRa-Based Solution to Reduce Energy Waste

Zacks Equity Research

Semtech Corporation SMTC recently announced that Elmeasure India Pvt. Ltd. (Elmeasure) and ClodPi Labs (ClodPi) have jointly developed a new LoRa-based prepaid energy metering solution.

These new LoRa-based prepaid smart meters report energy usage data in real time. The users can receive alerts through email or text message about varied problems, including rate spikes or any occurrence of meter tampering. This helps customers to keep a track on energy usage and thereby reduce operating costs.

These smart meters enable customers to manage multiple meter solutions, including water and gas, under the same platform for aggregate viewing and management.

The LoRa Technology enables long-range connectivity of Internet of Things (IoT) devices and aids in connecting sensors to the cloud. Its long-range performance and low power consumption requirement enhance the overall performance of smart meters. Moreover, this technology helps in real-time communication of data and analytics to enhance efficiency as well as productivity.

Consequently, this move is likely to boost the adoption rate of the company’s LoRa technology in the smart water meter market, which in turn will drive the top line.

Semtech Corporation Price and Consensus

 

Semtech Corporation Price and Consensus

Semtech Corporation price-consensus-chart | Semtech Corporation Quote

Market Opportunities to Aid Growth

This deal will strengthen Semtech’s presence in the smart meters market on the back of growing proliferation of computing technologies, Internet usage, and smart home and IoT devices.

Per a report from MarketsandMarkets, the global smart meters market is expected to witness a CAGR of 9.3% in the 2017-2022 period.

The latest deal will help Semtech to reap benefits from potential growth in the smart meters market.

This will aid in sustaining the momentum of the company’s LoRa-based solutions in this space.

Partnerships Play a Key Role

Semtech is witnessing growing strategic alliances and contracts, thanks to cost-efficient abilities of LoRa technology in creating and deploying IoT solutions.

In addition to the current deal, the company recently joined forces with Continental Automated Buildings Association (CABA) to enhance and innovate the latter’s portfolio of smart home and building technologies.

Additionally, per a deal between Ineo-Sense and Lauak Group, the former will provide LoRa-enabled asset tracking sensors that will be integrated into the latter’s manufacturing containers.

Further, it has been selected to be used in Brazil’s network, which is based on the LoRaWAN protocol, deployed by American Tower. Moreover, Lemonbeat has adopted LoRa technology to enhance smart metering solutions.

We believe Semtech is well poised to rapidly penetrate into the expanding IoT market, aided by the highly popular LoRa technology.

Zacks Rank & Other Stocks to Consider

Currently, Semtech carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Itron, Inc. ITRI, MACOM Technology Solutions Holdings, Inc. MTSI and Fiverr International Ltd. FVRR. While Itron sports a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Itron, MACOM Technology and Fiverr is currently projected at 25%, 15% and 44.2%, respectively.

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