Start here if you're new
what it is
Semtech makes specialty chips that move, protect, and sense data inside communications, industrial, and consumer equipment.
how it gets paid
Last fiscal year Semtech made about $1.05B in net sales. Signal Integrity (legacy segment view) was still the largest line at about $472M, or roughly 45% of sales.
why it's growing
Net sales grew about 15% last fiscal year. Latest reported quarter was about $274M, up about 9% vs. prior year, with adjusted gross margin near 51.6%.
what just happened
Semtech beat the Q4 adjusted EPS consensus, posting $0.44 versus about $0.43 expected, while record annual net sales crossed $1B.
At a glance
B balance sheet — gets the job done, barely
30/100 earnings predictability — expect surprises
~50x on FY2026 adjusted EPS — you're paying up for this one
16.0% return on capital — nothing to write home about
xvary composite: 39/100 — weak
What they do
Semtech makes specialty chips that move, protect, and sense data inside communications, industrial, and consumer equipment.
Semtech sells into the boring plumbing of electronics, where redesigns are slow and mistakes are expensive. That helps keep customers around once a chip is designed in. You can see the payoff in adjusted gross margin near 52% in the latest quarter (gross margin → money left after making the product → room to fund R&D and still earn) and majority international sales, which says the reach is global.
How they make money
$1.05B
annual net sales · their business grew about +15% last fiscal year (FY2026)
Signal Integrity
$472M
+9.0%
Wireless & Sensing
$325M
+6.0%
Protection
$136M
2.0%
Industrial end market
$74M
+4.0%
Consumer end market
$42M
1.0%
The products that matter
specialized analog chip portfolio
Analog & Mixed-Signal Semiconductors
~$1.05B net sales · ~+15% vs. prior year (FY2026)
it's the whole business right now: record annual net sales above $1B, double-digit growth, and adjusted EPS that re-rated with the cycle. the single-line segment view says you are underwriting management execution more than clean disclosure.
entire revenue base
Key numbers
~50x
P/E (vs. FY2026 adj. EPS)
P/E → price compared with adjusted earnings → you are paying a growth multiple; use GAAP too because the tax line is shifting (FY2027 guide).
~18%
adj. operating margin (Q4 FY2026)
Operating margin → profit after running the business → on an adjusted basis the latest quarter looked much healthier than legacy GAAP prints from the turnaround years.
$1.05B
annual net sales
This is the actual size of the business today (FY2026), which matters because the market cap is about $8B, or roughly 7.6x sales.
16.0%
return on capital
Return on capital → profit earned on the money invested in the business → decent economics, but not enough alone to justify any price.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 10 / 100
- long-term debt ~$503M (Mar 2026 call; leverage trending down)
- adjusted diluted EPS $1.71 FY2026 — up sharply vs. prior year on adjusted basis
- cash & equivalents ~$195M at quarter end (per Q4 FY2026 call)
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SMTC 3 years ago → it's now worth $28,300.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Semtech beat on adjusted EPS, posting $0.44 versus about a $0.43 consensus, as Q4 FY2026 net sales reached a record $274.4M (up ~9% vs. prior year).
Adjusted gross margin was about 51.6% in the quarter. For the full fiscal year, adjusted diluted EPS was $1.71 (up ~94% vs. prior year) on $1.05B of net sales — a cleaner profitability line than older GAAP-loss years.
$274.4M
net sales (Q4)
$0.44
adj. diluted EPS
51.6%
adj. gross margin
the number that mattered
The ~51.6% adjusted gross margin matters most because margin quality, not just record sales, is what has to justify a ~50x multiple on adjusted earnings.
-
semtech continues to fire on all cylinders.looking at it with added granularity, we believe that the company ended a very good fiscal 2025 with solid january-period results. (the company was scheduled to announce results shortly after we went to press with this issue.) there were a few factors that drove results during the first three quarters of the year.
-
the infrastructure end market delivered record figures during the third quarter of last year, fueled by healthy demand for data center networking, which registered 30% vs. prior year growth.the industrial segment, which is the company’s largest division, posted healthy gains throughout the year due to the transition from 4g to 5g in internet of things applications. a higher top line, along with other efficiency initiatives, helped to boost operating margins through the first three-quarters of the year.
-
we look for the positive momentum to continue as we turn our attention to fiscal 2026 and beyond.semtech has a significant and growing presence in artificial intelligence, primarily by providing high-performance, power-efficient analog and mixed-signal semiconductors essential for ai data center infrastructure.
-
these shares have been in the good graces of wall street of late.
-
in fact, at the time of this writing, they have increased in price by nearly 180% over the past year.this is a testament to the strong recent earnings performance, coupled with a positive outlook moving forward. we have rolled out our projections to the 2029-2031 time frame and now look for earnings in the neighborhood of $4.50 a share. our optimism is based on the company’s strong position in many of the faster-growing segments of the chip market.
source: Semtech Q4 & FY2026 results / earnings call (Mar 16, 2026)
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What could go wrong
the #1 risk is Sierra Wireless integration not translating into cleaner earnings.
med
Sierra Wireless integration
this is the company-specific execution bet sitting underneath the whole story. if the acquisition adds complexity faster than it adds profitable growth, semtech stays a "turnaround" longer than the multiple allows.
At ~50x adjusted earnings, the stock does not leave much room for integration drift. A stumble would hit sentiment before it hits reported revenue.
med
AI infrastructure demand cooling from a hot base
the bullish framing leans on infrastructure and data-center demand, including a 30% growth burst in the third quarter. if that pace normalizes, the market may discover it paid up for a cyclical improvement and called it a secular one.
This matters because the business did about $1.05B of annual net sales, not $9B. One hot end market still carries real weight when the base is sub–mega-cap.
med
profitability still looks inconsistent
FY2026 adjusted diluted EPS reached $1.71, but GAAP still carries acquisition and tax noise — and management flagged a much higher adjusted tax rate guide for FY2027. that's not the same as a smooth, steady compounding print.
If margins slip or tax geography bites, the gap between headline adjusted results and a weak 39/100 composite score stays the main argument against the stock.
The risk stack is simple: a ~$1.05B net-sales business with low predictability is trading on improvement. If execution slips, a ~50x multiple on adjusted earnings can compress a lot faster than revenue does.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
quarterly margin direction
watch whether adjusted operating margin can hold near the high-teens after M&A and tax-rate noise. if it slips, the narrative thins fast.
metric
EPS follow-through above $1.71
full-year adjusted diluted EPS reached $1.71 in FY2026. the next question is whether semtech can build on that or whether tax and integration costs widen again.
trend
infrastructure demand after the 30% spike
record infrastructure results helped drive the story. you want to see whether that demand broadens or peaks.
calendar
next earnings guide versus a stock near its high
with shares trading at $85.14 against a $24–$96 52-week range, guidance matters more than retrospective beats right now.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this could lag from here despite the big run.
risk profile
below average
stability score 4 means bigger swings than most stocks. this is not a bunker position.
chart momentum
average
technical score 3 says the chart is no longer doing anything especially heroic. after a huge move, that's called gravity.
earnings predictability
30 / 100
predictability this low means estimates are less trustworthy. if you own it, expect revisions and sharp reactions.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 160 buyers vs. 103 sellers in 4q2025. total institutional holdings: 97.4M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$60
$158
$85
current price
$109
target midpoint · +28% from current · 3-5yr high: $140 (+65% · 13% ann'l return)
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