Semtech (SMTC 5.95%) is not one of the more recognizable names in the tech sector, but investors were drawn to it regardless this week after it was tagged as a top stock pick by an analyst. This helped push the Internet of Things (IoT) chipmaker's shares up by almost 20% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.
The stock makes an analyst's list of choice picks
Before market open Tuesday, Baird's Tristan Gerra included Semtech in his "Bullish Fresh Pick" list of attractive stocks. He made the move following a set of meetings with the company.
In the wake of these, he wrote, "We've come to believe that Semtech is very well positioned in the upcoming ramp of new AI platforms, while the ramp of [linear pluggable objects] and the next wave of optical links represent new, significant catalysts as well."
Gerra added that in his view, there's a "significant disparity" between what it's learned about the IoT components supplier's research and development efforts, its market positioning, and its growth opportunities, and the general perception of the company.
Several days after Gerra's note, Semtech published its latest quarterly earnings. For its last quarter of fiscal 2024, the company booked slightly under $193 million in net sales; this was down from the nearly $201 million it earned in the same period the previous fiscal year.
On the bottom line, Semtech flipped to a non-GAAP (adjusted) net loss of $3.7 million ($0.06 per share) from a profit of slightly under $1.5 million in the year-ago period.
Those results weren't far off the consensus analyst estimates. Prognosticators tracking the stock were collectively modeling $190.7 million on the top line and a $0.04-per-share adjusted net loss.
NASDAQ: SMTC
Key Data Points
Semtech guides to breakeven
Semtech also proffered first-quarter guidance that was in the neighborhood of analyst projections. It's expecting to earn $200 million in net sales and break even on the bottom line. The average pundit estimates are $195 million and a net profit of $0.01 per share, respectively.
