Back to top

Image: Bigstock

Semtech (SMTC) Expands Presence in Smart Meter Space Via New Deal

Read MoreHide Full Article

Semtech Corporation (SMTC - Free Report) recently announced that the company’s Low power, high Range (LoRa) devices and LoRaWAN protocol have been incorporated by Vision Metering, LLC (Vision) in its smart electric meters and meter interface units for water and gas meters across the United States and Latin America.

Vision’s solutions upgrade legacy systems to long range AMI solutions, thereby eliminating traditional manual meter reading methods and saving costs.

Vision’s smart meter solutions utilize LoRa-enabled cooperative and publicly-owned utility companies to improve efficiency as well as reduce management costs by avoiding costly third-party connectivity contracts. It allows users to communicate, effectively monitor data and provide alerts, thereby increasing efficiency.

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

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

Market Opportunities to Aid Growth

This deal will strengthen Semtech’s presence in the smart meter market on the back of supportive government policies for smart meters, real-time monitoring of utility systems and dynamic pricing, need for reduced blackouts as well as utility system failures across regions such as Asia Pacific, North America, South America, Europe, and Middle East & Africa.

Per a report from MarketsandMarkets, the global smart meter market is expected to witness a CAGR of 6.7% in the 2020-2025 period.

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

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

Partnerships Play Key Role

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.

In addition to the current deal, the company recently joined forces with Continental Automated Buildings Association to enhance and innovate the latter’s portfolio of smart home and building technologies.

Additionally, per a deal between Ineo-Sense and Lauak Group, the former will provide LoRa-enabled asset tracking sensors that will be integrated into the latter’s manufacturing containers.

Further, it has been selected to be used in Brazil’s network, which is based on the LoRaWAN protocol that has been deployed by American Tower. Moreover, Lemonbeat has adopted the LoRa technology to enhance smart metering solutions.

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

However, it continues to be affected by mounting competition in the semiconductor space, including sluggish demand in China. The resultant pricing pressure could dampen the company’s margins and profitability. Seasonality in the consumer segment remains a woe and might hamper its top line.

Zacks Rank & Stocks to Consider

Currently, Semtech carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Analog Devices, Inc. (ADI - Free Report) , MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) and Microchip Technology Incorporated (MCHP - Free Report) , 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 for Analog Devices, MACOM Technology, and Microchip Technology is currently projected at 12.3%, 37%, and 15.5%, respectively.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>

Published in