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Semtech (SMTC) to Report Q4 Earnings: Will it Disappoint?
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Semtech Corporation (SMTC - Free Report) is slated to report fourth-quarter 2016 results on Mar 8. Last quarter, the company reported in-line results.
In the last one year, shares of Semtech outperformed the Zacks categorized Semiconductor Analog & Mixed industry. While the industry gained 42.25%, the stock returned 58.58%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Semtech’s third-quarter earnings matched the Zacks Consensus Estimate. However, revenues of $137.2 million were up 0.9% sequentially and 18.5% year over year. The upside was driven by strong demand for the company’s consumer and communication end markets, partially offset by weakness in the enterprise market.
Also, bookings increased 48% year over year and the book-to-bill ratio was above 1.
We believe that Semtech’s new design wins, product introductions and solid execution will boost revenues and margins in the near term. However, challenges to several key end markets could weigh on the company’s prospects.
For the upcoming fourth-quarter results, the company expects revenues in the range of $134 million to $142 million; GAAP earnings per share in the range of 13–17 cents and non-GAAP earnings in the range of 33–37 cents.
Earnings Whispers
Our proven model does not conclusively show that Semtech will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at 26 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Semtech has a Zacks Rank #3.
We caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some stocks, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Envestnet, Inc. (ENV - Free Report) with an Earnings ESP of +4.55% and a Zacks Rank #1.
Spectrum Pharmaceuticals, Inc. with an Earnings ESP of +15.38% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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Semtech (SMTC) to Report Q4 Earnings: Will it Disappoint?
Semtech Corporation (SMTC - Free Report) is slated to report fourth-quarter 2016 results on Mar 8. Last quarter, the company reported in-line results.
In the last one year, shares of Semtech outperformed the Zacks categorized Semiconductor Analog & Mixed industry. While the industry gained 42.25%, the stock returned 58.58%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Semtech’s third-quarter earnings matched the Zacks Consensus Estimate. However, revenues of $137.2 million were up 0.9% sequentially and 18.5% year over year. The upside was driven by strong demand for the company’s consumer and communication end markets, partially offset by weakness in the enterprise market.
Also, bookings increased 48% year over year and the book-to-bill ratio was above 1.
We believe that Semtech’s new design wins, product introductions and solid execution will boost revenues and margins in the near term. However, challenges to several key end markets could weigh on the company’s prospects.
For the upcoming fourth-quarter results, the company expects revenues in the range of $134 million to $142 million; GAAP earnings per share in the range of 13–17 cents and non-GAAP earnings in the range of 33–37 cents.
Earnings Whispers
Our proven model does not conclusively show that Semtech will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at 26 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Semtech has a Zacks Rank #3.
We caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Semtech Corporation Price and Consensus
Semtech Corporation Price and Consensus | Semtech Corporation Quote
Stocks to Consider
Here are some stocks, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Envestnet, Inc. (ENV - Free Report) with an Earnings ESP of +4.55% and a Zacks Rank #1.
Tailored Brands, Inc. with an Earnings ESP of +9.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spectrum Pharmaceuticals, Inc. with an Earnings ESP of +15.38% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>