Semtech Shares Surge
Semtech shares surge reported impressive second-quarter results, surpassing market expectations and driving its shares up by over 6% in premarket trading on Wednesday.
The semiconductor company posted an adjusted earnings per share (EPS) of $0.11, exceeding analysts’ expectations of $0.09. Revenue for the quarter reached $215.4 million, topping the consensus forecast of $212.3 million and marking a 4% sequential increase.
Improved Margins Highlight Financial Strength
In the second quarter, Semtech’s adjusted gross margin improved to 50.4%, up 60 basis points from the previous quarter. Additionally, the adjusted operating margin expanded to 14.2%, reflecting a 200 basis point increase.
Q3 Guidance Exceeds Market Expectations
Looking ahead, Semtech expects third-quarter revenue to range between $228 million and $238 million, with the midpoint exceeding the current analyst consensus of $232.4 million. The company also projects adjusted EPS between $0.20 and $0.26, compared to Wall Street’s estimate of $0.23.
Analyst Reactions and Future Prospects
Following the earnings report, Stifel analysts reiterated their Buy rating on SMTC stock, raising their price target from $45 to $50. “As SMTC continues to benefit from the cyclical recovery, we believe the company is well-positioned with secular drivers across its product portfolio, particularly within DC/AI-based applications,” the analysts noted.
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