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Semtech's (SMTC) LoRa Devices Deployed on Avocado Farms

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Semtech Corporation (SMTC - Free Report) recently announced that ICT International and Definium Technologies are using advanced products based on Semtech’s LoRa devices and LoRaWAN protocol.

These sensors have been used by ICT International and Definium in the avocado farms in Australia to determine the ongoing causes of low crop yield and thereby improve the yield therein.

These new LoRa enabled devices help to accurately monitor the moisture flow inside the plants. The new LoRa-based soil moisture sensors, sap flow sensors and vapor-pressure deficit sensors, among others, allow farmers to accurately identify the periods of low soil moisture and water requirement for improving yield.

In addition, these LoRa devices help farmers by offering them up to 30 miles of network coverage from a single LoRaWAN gateway in rural areas.

Reportedly, farmers across Australia are integrating these LoRa-based sensors into their own smart irrigation systems to better address and respond to crop requirements for significantly increasing yield, as well as reducing expenses.

The LoRa Technology enables long-range connectivity of IoT devices and aids in connecting sensors to the cloud. Its long-range performance and low power consumption requirement enhance overall performance. Moreover, this technology helps in real-time communication of data and analytics to enhance efficiency, as well as productivity.

Semtech is witnessing growing strategic alliance and contracts, thanks to cost-efficient abilities of the LoRa technology in creating as well as deploying IoT solutions.

Consequently, the move is likely to boost the adoption rate of the company’s LoRa technology, which in turn will drive the top line.

Market Opportunities to Aid Growth

This deal will strengthen Semtech’s presence in the smart agriculture market on the back of rapidly growing population, surging use of modern technologies in agricultural products, and growing focus of farmers on livestock monitoring as well as disease detection to fuel growth of smart irrigation systems. Moreover, rising investments in the agriculture technology sector have propelled the smart agriculture market growth.

Per a report from MarketsandMarkets, the smart agriculture market is expected to reach $21.9 billion by 2025. It is expected to witness a CAGR of 9.8% in the 2020-2025 period.

The latest deal will help Semtech to reap benefits from potential growth in the smart agriculture market.

This will aid the momentum of the company’s LoRa-based solutions in this space.

IoT Market’s Prospects

IoT devices have been gaining significant traction in recent times. These devices have been successful in making an impact across all end markets served by the company.

Per IOT Analytics, the number of active IoT devices is expected to grow from 7 billion in 2018 to 10 billion and 22 billion by 2020 and 2025, respectively, including devices on the consumer and enterprise side.

Presently, LoRaWAN networks are operating in many countries. It expects the LoRaWAN open protocol to reach more countries in the near term. Industry experts expect four out of every 10 long-range IoT connections to be powered by LPWAN, with LoRaWAN being the dominant player.

We believe Semtech is well poised to rapidly penetrate into the expanding IoT market, aided by the highly popular LoRa technology.

Zacks Rank & Stocks to Consider

Currently, Semtech carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Etsy, Inc. (ETSY - Free Report) and Maxim Integrated Products, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Dropbox, Etsy and Maxim is pegged at 34.4%, 26.5% and 10%, respectively.

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