Yahoo Finance Semtech Corporation (NASDAQ:SMTC) Released Earnings Last Week And Analysts Lifted Their Price Target To US$33.90
Shareholders will be ecstatic, with their stake up 23% over the past week following Semtech Corporation's (NASDAQ:SMTC) latest full-year results. Revenues were in line with expectations, at US$869m, while statutory losses ballooned to US$17.03 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Semtech
Taking into account the latest results, Semtech's eleven analysts currently expect revenues in 2025 to be US$865.1m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 95% to US$0.86. Before this latest report, the consensus had been expecting revenues of US$864.9m and US$0.93 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The average price target rose 6.3% to US$33.90, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Semtech at US$42.00 per share, while the most bearish prices it at US$26.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.4% by the end of 2025. This indicates a significant reduction from annual growth of 9.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. It's pretty clear that Semtech's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Semtech. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Semtech analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Semtech has 2 warning signs we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
