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Semtech (SMTC) Up 20.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Semtech (SMTC - Free Report) . Shares have added about 20.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Semtech due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Semtech Corporation before we dive into how investors and analysts have reacted as of late.
Semtech posted second-quarter fiscal 2027 non-GAAP earnings of 71 cents per share, which beat the Zacks Consensus Estimate by 14.5%. The bottom line exceeded management’s guidance of 61 cents (+/-2 cents) and reflected a robust year-over-year improvement of approximately 73.2%.
Semtech beat on earnings in each of the trailing four quarters, the average surprise being 9.8%.
SMTC’s second-quarter fiscal 2027 revenues of $341.9 million topped the Zacks Consensus Estimate by 4.1% and came above management’s guidance of $328 million (+/- $5 million). The top line jumped 32.7% year over year.
Semtech’s Q2 Revenues in Terms of End Markets
Sales from the infrastructure market totaled $123.7 million (36.2% of net sales), exhibiting year-over-year growth of 69%, supported by the expanding data center business. The increase reflected continued strength in 800G products and the early ramp of 1.6T FiberEdge and CopperEdge solutions.
Sales from the industrial market amounted to $178.9 million (52.3% of net sales), up 25.1% year over year.
Sales from the high-end consumer market totaled $39.3 million (11.5% of net sales), down 4.6% year over year.
SMTC’s Q2 Revenues in Terms of Product Lines
Signal Integrity (36.9% of net sales) sales totaled $126.2 million, up 64.3% year over year.
Analog Mixed Signal & Wireless (34.3% of net sales) sales amounted to $117.4 million, which rose 27.6% year over year.
IoT Systems and Connectivity (28.8% of net sales) sales totaled $98.3 million, up 10.7% on a year-over-year basis.
Semtech Builds Data Center and LoRa Momentum
FiberEdge demand remained strong across leading hyperscalers, and Semtech said it is designed into every major module provider in its target markets. The company expects 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027 and is engaged in CopperEdge design-ins at bandwidths up to 3.2T.
LoRa-enabled sales set another record at $58 million, up 58% year over year. The company cited expansion across smart utilities, buildings, cities and asset management, while Amazon Sidewalk is expanding internationally after Ring's U.S. launch of LoRa-based sensors. Semtech is also expanding photonics capacity, with high-power CW laser revenues expected to begin in the first half of fiscal 2028.
Semtech’s Margins in Detail
The non-GAAP gross margin of 54.5% expanded 130 basis points (bps) on a year-over-year basis and 150 bps sequentially.
Non-GAAP operating income increased 72% year over year to $83.6 million. The non-GAAP operating margin expanded to 24.4% from 18.8% reported in the year-ago quarter. On a quarter-over-quarter basis, non-GAAP operating income increased 41%, while margin expanded 400 basis points.
Semtech’s Balance Sheet & Cash Flow
As of July 26, 2026, cash and cash equivalents totaled $204.1 million, up from $163.3 million as of April 26, 2026.
The long-term debt amounted to $349.4 million, down from the previous quarter’s reported figure of $492 million.
During the second quarter, Semtech generated operating cash flow and free cash flow of $68.9 million and $61.4 million, respectively.
Semtech Initiates Q3 FY27 Guidance
For the third quarter of fiscal 2027, Semtech expects net sales to be $410 million (+/- $5 million).
The non-GAAP gross margin is expected to be 58.3% (+/- 100 bps). The non-GAAP operating margin is anticipated to be 31% (+/- 60 bps).
Non-GAAP earnings are expected to be $1.05 (+/- 3 cents) per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 60.76% due to these changes.
VGM Scores
Currently, Semtech has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Semtech has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Semtech is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, Analog Devices (ADI - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended July 2026 more than a month ago.
Analog Devices reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of +39.6%. EPS of $3.45 for the same period compares with $2.05 a year ago.
Analog Devices is expected to post earnings of $3.84 per share for the current quarter, representing a year-over-year change of +69.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Analog Devices. Also, the stock has a VGM Score of C.
View the Zacks #1 Rank List
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Semtech (SMTC) Up 20.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Semtech (SMTC - Free Report) . Shares have added about 20.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Semtech due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Semtech Corporation before we dive into how investors and analysts have reacted as of late.
Semtech's Q2 Earnings Surpass Estimates, Revenues Increase Y/Y
Semtech posted second-quarter fiscal 2027 non-GAAP earnings of 71 cents per share, which beat the Zacks Consensus Estimate by 14.5%. The bottom line exceeded management’s guidance of 61 cents (+/-2 cents) and reflected a robust year-over-year improvement of approximately 73.2%.
Semtech beat on earnings in each of the trailing four quarters, the average surprise being 9.8%.
SMTC’s second-quarter fiscal 2027 revenues of $341.9 million topped the Zacks Consensus Estimate by 4.1% and came above management’s guidance of $328 million (+/- $5 million). The top line jumped 32.7% year over year.
Semtech’s Q2 Revenues in Terms of End Markets
Sales from the infrastructure market totaled $123.7 million (36.2% of net sales), exhibiting year-over-year growth of 69%, supported by the expanding data center business. The increase reflected continued strength in 800G products and the early ramp of 1.6T FiberEdge and CopperEdge solutions.
Sales from the industrial market amounted to $178.9 million (52.3% of net sales), up 25.1% year over year.
Sales from the high-end consumer market totaled $39.3 million (11.5% of net sales), down 4.6% year over year.
SMTC’s Q2 Revenues in Terms of Product Lines
Signal Integrity (36.9% of net sales) sales totaled $126.2 million, up 64.3% year over year.
Analog Mixed Signal & Wireless (34.3% of net sales) sales amounted to $117.4 million, which rose 27.6% year over year.
IoT Systems and Connectivity (28.8% of net sales) sales totaled $98.3 million, up 10.7% on a year-over-year basis.
Semtech Builds Data Center and LoRa Momentum
FiberEdge demand remained strong across leading hyperscalers, and Semtech said it is designed into every major module provider in its target markets. The company expects 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027 and is engaged in CopperEdge design-ins at bandwidths up to 3.2T.
LoRa-enabled sales set another record at $58 million, up 58% year over year. The company cited expansion across smart utilities, buildings, cities and asset management, while Amazon Sidewalk is expanding internationally after Ring's U.S. launch of LoRa-based sensors. Semtech is also expanding photonics capacity, with high-power CW laser revenues expected to begin in the first half of fiscal 2028.
Semtech’s Margins in Detail
The non-GAAP gross margin of 54.5% expanded 130 basis points (bps) on a year-over-year basis and 150 bps sequentially.
Non-GAAP operating income increased 72% year over year to $83.6 million. The non-GAAP operating margin expanded to 24.4% from 18.8% reported in the year-ago quarter. On a quarter-over-quarter basis, non-GAAP operating income increased 41%, while margin expanded 400 basis points.
Semtech’s Balance Sheet & Cash Flow
As of July 26, 2026, cash and cash equivalents totaled $204.1 million, up from $163.3 million as of April 26, 2026.
The long-term debt amounted to $349.4 million, down from the previous quarter’s reported figure of $492 million.
During the second quarter, Semtech generated operating cash flow and free cash flow of $68.9 million and $61.4 million, respectively.
Semtech Initiates Q3 FY27 Guidance
For the third quarter of fiscal 2027, Semtech expects net sales to be $410 million (+/- $5 million).
The non-GAAP gross margin is expected to be 58.3% (+/- 100 bps). The non-GAAP operating margin is anticipated to be 31% (+/- 60 bps).
Non-GAAP earnings are expected to be $1.05 (+/- 3 cents) per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 60.76% due to these changes.
VGM Scores
Currently, Semtech has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Semtech has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Semtech is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, Analog Devices (ADI - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended July 2026 more than a month ago.
Analog Devices reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of +39.6%. EPS of $3.45 for the same period compares with $2.05 a year ago.
Analog Devices is expected to post earnings of $3.84 per share for the current quarter, representing a year-over-year change of +69.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Analog Devices. Also, the stock has a VGM Score of C.