The 10-second takeaway
For the quarter ended July 29 (Q2), Semtech met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Semtech reported revenue of $150.7 million. The six analysts polled by S&P Capital IQ hoped for a top line of $150.0 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $130.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.41. The eight earnings estimates compiled by S&P Capital IQ forecast $0.41 per share. GAAP EPS of $0.15 for Q2 were 63% lower than the prior-year quarter's $0.40 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.5%, 1,090 basis points worse than the prior-year quarter. Operating margin was 1.8%, 2,270 basis points worse than the prior-year quarter. Net margin was 6.7%, 1,410 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $157.4 million. On the bottom line, the average EPS estimate is $0.48.
Next year's average estimate for revenue is $582.5 million. The average EPS estimate is $1.63.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 88 members out of 98 rating the stock outperform, and 10 members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Semtech a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Semtech is outperform, with an average price target of $32.86.
Is Semtech the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Semtech to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.