Chipmaker Semtech Q3 net sales edge past estimates

Overview

• Semtech fiscal Q3 net sales grow 13% yr/yr, slightly beating analyst expectations

• Adjusted EPS for fiscal Q3 beats analyst expectations

• GAAP diluted loss per share improves to $0.03 from $0.10 a year ago

Outlook

• Semtech projects Q4 net sales of $273.0 mln +/- $5.0 mln

• Adjusted EPS for Q4 expected at $0.43 +/- $0.03

• Company anticipates adjusted gross margin of 51.2% +/- 50 bps in Q4

Result Drivers

• R&D INVESTMENTS - Returns on disciplined R&D investments and expanding customer partnerships drove strong Q3 results, per CEO Hong Hou

• COST OPTIMIZATION - Reduced cash interest costs from capital structure optimization contributed to increased operating and free cash flows

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for Semtech Corp is $78.00, about 18.1% above its November 21 closing price of $63.85

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 27 three months ago

Press Release: ID:nBw5C2HGVa

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