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Semtech (SMTC) Beats Stock Market Upswing: What Investors Need to Know

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In the latest trading session, Semtech (SMTC - Free Report) closed at $31.51, marking a +1.47% move from the previous day. This move outpaced the S&P 500's daily gain of 0.87%. On the other hand, the Dow registered a gain of 0.67%, and the technology-centric Nasdaq increased by 1.11%.

The chipmaker's stock has climbed by 35.47% in the past month, exceeding the Computer and Technology sector's loss of 5.98% and the S&P 500's loss of 3.97%.

Analysts and investors alike will be keeping a close eye on the performance of Semtech in its upcoming earnings disclosure. The company is predicted to post an EPS of $0, indicating a 100% decline compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $200.16 million, down 15.38% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $0.55 per share and revenue of $869.44 million, indicating changes of +292.86% and +0.08%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Semtech. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 175% lower. Currently, Semtech is carrying a Zacks Rank of #4 (Sell).

Looking at its valuation, Semtech is holding a Forward P/E ratio of 56.16. This valuation marks a premium compared to its industry's average Forward P/E of 31.28.

It is also worth noting that SMTC currently has a PEG ratio of 2.81. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Semiconductor - Analog and Mixed industry held an average PEG ratio of 2.81.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 242, finds itself in the bottom 4% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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