Chipmaker Semtech beats Q4 profit estimates on strong demand from data centers

Overview

• US semiconductor maker's Q4 revenue rose 9% yr/yr to record level

• Adjusted EPS for Q4 beat analyst expectations

• Company cites portfolio strength and execution for revenue and earnings growth

Outlook

• Semtech sees Q1 FY27 net sales at $283 mln, plus or minus $5 mln

• Company expects Q1 FY27 adjusted diluted EPS of $0.45, plus or minus $0.03

• Semtech forecasts Q1 FY27 adjusted gross margin at 52.8%, plus or minus 50 bps

Result Drivers

• DATA CENTER DEMAND - Co said it is benefiting from data center buildout and demand for solutions supporting 800G, 1.6T, and 3.2T era, per CEO Hong Hou

• R&D INVESTMENT - Co said continued investment in research and development is supporting its position in next-generation interconnect technologies

• CASH FLOW GENERATION - Co highlighted strong operating and free cash flow, exceeding amounts reported for all of prior fiscal year, per CFO Mark Lin

Company press release: ID:nBw9G88Kxa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 1 "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 $95.00, about 12% above its March 13 closing price of $84.85

• The stock recently traded at 39 times the next 12-month earnings vs. a P/E of 35 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.