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Semtech (SMTC) Hits 52-Week High on Bullish Growth Trends

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Semtech Corporation’s (SMTC - Free Report) shares hit a new 52-week high of $43.35 on Apr 10, closing a shade lower at $42.80. Barring minor hiccups, Semtech’s share price has steadily been on an uptrend. The stock has the potential for further price appreciation with long-term earnings growth expectation of 5%.

The company’s surprise history has been pretty impressive. It beat estimates in all of the trailing four quarters, with an average positive surprise of 6.08%.

Over the last year, the company’s shares have gained 30.9%, outperforming its industry’s 16.3% rally.

Key Factors

Semtech is currently riding on differentiated growth drivers and diversification strategy. Key growth drivers for Semtech are product differentiation, operational flexibility, and specific focus on fast-growing segments and regions.

We believe that the company’s new design wins, product launches and perfect execution will take it from strength to strength.

The price appreciation can be attributed to the company’s strong fiscal fourth-quarter earnings. In the fiscal fourth quarter, results of which were reported on Mar 14, earnings of 42 cents per share beat the Zacks Consensus Estimate. Also, Semtech’s revenues of $140.6 million increased year over year. The increase was driven by a strong demand, reinforcing the company’s enterprise computing end market.

The company’s unrivalled market position, compelling product lines, strong revenue growth, continued innovation and strong long-term growth potential consolidate its market presence favorably.

For first-quarter fiscal 2019, management expects revenues in the range of $147-$153 million. This implies 7% sequential increase at the mid-point of the guided range. The Zacks Consensus Estimate is pegged at $150.2 million. Non-GAAP earnings per share are expected in the range of 45-47 cents. This implies a 10% sequential increase at the mid-point of the guided range. The Zacks Consensus Estimate is pegged at 46 cents.

Such a bullish outlook with continued growth impetus and core focus perhaps gave a boost to investors’ confidence and catapulted its share price to a new 52-week high.

Semtech Corporation Price and Consensus

 

Semtech Corporation Price and Consensus | Semtech Corporation Quote

Zacks Rank & Stocks to Consider

Semtech has a Zacks Rank #3 (Hold).Some better-ranked stocks in the technology sector are Stamps.com Inc. , PetMed Express (PETS - Free Report) and Agilent Technologies (A - Free Report) . While Stamps.com sports a Zacks Rank #1 (Strong Buy), PetMed and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for Stamps.com, PetMed and Agilent is projected to be 15%, 10% and 10.8%, respectively.

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