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Lattice Semiconductor Corporation (LSCC) Hit a 52 Week High, Can the Run Continue?

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Have you been paying attention to shares of Lattice Semiconductor (LSCC - Free Report) ? Shares have been on the move with the stock up 7.8% over the past month. The stock hit a new 52-week high of $93.35 in the previous session. Lattice Semiconductor has gained 37.2% since the start of the year compared to the 11.2% move for the Zacks Computer and Technology sector and the 18.5% return for the Zacks Electronics - Semiconductors industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 13, 2023, Lattice reported EPS of $0.49 versus consensus estimate of $0.48 while it beat the consensus revenue estimate by 0.43%.

For the current fiscal year, Lattice is expected to post earnings of $2.06 per share on $741.13 million in revenues. This represents a 17.71% change in EPS on a 12.23% change in revenues. For the next fiscal year, the company is expected to earn $2.39 per share on $831.4 million in revenues. This represents a year-over-year change of 16.12% and 12.18%, respectively.

Valuation Metrics

Lattice may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Lattice has a Value Score of D. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 43.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.4X. On a trailing cash flow basis, the stock currently trades at 54.3X versus its peer group's average of 11.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Lattice currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Lattice passes the test. Thus, it seems as though Lattice shares could have a bit more room to run in the near term.

How Does LSCC Stack Up to the Competition?

Shares of LSCC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Broadcom Inc. (AVGO - Free Report) . AVGO has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.

Earnings were strong last quarter. Broadcom Inc. beat our consensus estimate by 1.67%, and for the current fiscal year, AVGO is expected to post earnings of $41.23 per share on revenue of $35.29 billion.

Shares of Broadcom Inc. have gained 3.9% over the past month, and currently trade at a forward P/E of 15.1X and a P/CF of 12.82X.

The Electronics - Semiconductors industry is in the top 43% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LSCC and AVGO, even beyond their own solid fundamental situation.

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