Semtech (NASDAQ:SMTC) Trading Down 7.3% - Is It Time to Sell?

On Thursday, Semtech Co. (NASDAQ:SMTC) saw its share price dip by 7.3%, marking a notable decline in its trading performance. The stock reached a low of $62.51 and eventually settled at $61.59. During the trading session, 117,649 shares changed hands, a significant decrease of 94% compared to the average trading volume of 1,883,683 shares, with the stock closing at $66.46 the previous day.

Recent Analyst Ratings

Semtech has garnered attention from various analysts, with changes in their ratings and target prices. Benchmark recently raised their price target for Semtech from $56.00 to $82.00, attaching a "buy" rating in a report released on November 26. Additionally, Susquehanna set a new price target at $60.00, up from $55.00, in a report dated November 21, classifying it as a "positive" outlook. Northland Securities also increased their target from $60.00 to $66.00, labeling it as "outperform" on December 10. Furthermore, Needham & Company LLC upped their price expectation from $70.00 to $74.00, also giving it a "buy" rating on December 12. Stifel Nicolaus followed suit by raising their target from $65.00 to $75.00, also supporting the stock with a "buy" rating on January 6. Currently, three analysts suggest holding the stock while eleven recommend buying, leading to a consensus rating of "Moderate Buy" with a target price of $72.00, according to MarketBeat.com.

Semtech's Price Movement

Semtech's stock has seen a fluctuating trajectory, with a 50-day moving average sitting at $65.85 and a 200-day moving average at $50.49. The company's market capitalization stands at $4.13 billion, with a price-to-earnings (PE) ratio of -4.18 and a price-to-earnings growth (PEG) ratio of 2.98. Notably, Semtech's beta is 1.64, indicating a higher volatility compared to the market. In their most recent quarterly earnings report on November 25, Semtech reported earnings of $0.26 per share, exceeding the consensus estimate of $0.23 by $0.03. Their revenue was reported at $236.80 million, outpacing expectations of $232.89 million, reflecting a 17.9% increase from the previous year, contrasting with last year’s earnings of $0.02 per share.

Insider Transactions

In recent insider activity, COO Asaf Silberstein sold 2,000 shares on January 15 at an average price of $70.00, totaling $140,000. Following this sale, he retained ownership of 76,417 shares valued at approximately $5,349,190, indicating a 2.55% reduction in his holdings. Another insider, SVP Imran Sherazi, sold 1,338 shares at an average price of $75.00 on January 17, resulting in a transaction of $100,350. Following this, Sherazi's remaining shares in the company are merely 14, valued around $1,050, denoting a drastic 98.96% reduction in their position. Over the last three months, insiders have sold a total of 16,747 shares, amounting to $1,095,061, and currently hold 0.60% of the company’s stock.

Institutional Investment Adjustments

Institutional investors have also been active in adjusting their stakes in Semtech recently. Huntington National Bank increased their holding by 105.2% in the third quarter, now owning 589 shares valued at $27,000 after acquiring an additional 302 shares. GAMMA Investing LLC raised their stake by 15.3% in the most recent quarter, now holding 3,166 shares worth $196,000 after purchasing 421 additional shares. Hanseatic Management Services Inc. improved their position by 3.2%, holding 14,406 shares valued at $658,000 post-transaction. Smartleaf Asset Management LLC increased their stake dramatically by 190.6%, and now owns 770 shares rated at $48,000 after buying an extra 505 shares during the last quarter. Creative Planning increased their position by 3.4% during the second quarter, now controlling 18,018 shares valued at $538,000 after the acquisition of 588 shares.

About Semtech Corporation

Semtech Corporation specializes in the design, development, and marketing of analog and mixed-signal semiconductors along with advanced algorithms. Their offerings include signal integrity products, optical data communications, video transport products, integrated circuits for data centers, enterprise networks, passive optical networks, and high-speed interface applications. The company also provides video solutions for broadcast applications and video-over-IP technology used in professional audio and video applications.

Conclusion

As Semtech's stock faces a notable decline, investors are left to ponder whether this downturn signifies an opportunity to sell or a chance to buy at a lower price. The variety of analyst ratings and endorsement could serve to bolster confidence amongst current investors, while recent insider trades may signal a cautious approach to holding the stock. Institutional changes further add layers to the evaluation of Semtech's performance and future potential.

Semtech, Stock, Earnings