雅虎香港財經 Can SMTC's Strong 5G Infrastructure Portfolio Push the Stock Higher?
Semtech’s SMTC expanding portfolio offerings for the infrastructure end market bode well for its prospects.
Through its Signal Integrity product group, SMTC offers optical and copper module ICs that support up to 1.6 Tb/s for Ethernet, Fibre Channel protocols in data center and broadband access applications as well as 4G, 5G and LTE applications for the infrastructure end market.
In the first half of fiscal 2025, revenues from the infrastructure end market accounted for roughly 26% of revenues, which jumped 34% year over year. Infrastructure revenues accounted for 25% of SMTC’s second-quarter fiscal 2025 revenues, driven by solid demand for FiberEdge TIAs, laser drivers and Tri-Edge 50G PAM4 products.
Semtech Corporation Price and Consensus
Semtech Corporation price-consensus-chart | Semtech Corporation Quote
SMTC Samples GN2255S for 5G Infrastructure
The latest GN2255S, which Semtech has started to sample, expands its portfolio offerings for the infrastructure market. GN2255S is its next-gen Tri-Edge 50 Gbps clock and data recovery (CDR) with integrated DML driver for SFP56 50G PAM4 bidirectional (BiDi) and CWDM6 optical modules.
The new CDR is part of the industry's only analog solutions for 50 Gbps fronthaul. Embracing this technology can lead to simpler, potentially more power-efficient designs.
Its real-time signal processing provides ultra-low latency essential for 5G advanced time-critical services needed in public safety, industrial control, smart grid management and so on.
SMTC Shares Ride on Strong Portfolio
SMTC’s increasing focus on Signal Integrity, as well as Analog Mixed Signal & Wireless product lines, has been a key catalyst driving share price movement.
On a year-to-date (YTD) basis, SMTC shares have registered a phenomenal return of 117.3%, outperforming the broader Zacks Computer and Technology sector’s appreciation of 22%.
Semtech shares have also outperformed the Zacks Semiconductor – Analog and Mixed industry as well as peers, including Monolithic Power Systems MPWR, MACOM Technology Solutions MTSI and Analog Devices ADI.
Shares of Monolithic Power, MACOM Technology and Analog Devices have returned 44.3%, 14.3% and 14.3%, respectively. The industry appreciated 5% YTD.
Trends, such as increasing bandwidth over high-speed networks and a growing need for more efficient energy management in home and industrial settings, are pushing the demand for SMTC’s products. This is expected to further drive the share price.
Expanding Portfolio to Aid SMTC’s Top-Line Growth
Semtech’s latest addition to its Transient Voltage Suppressors product portfolio, the RClamp0822B, is designed to protect high-speed data interfaces across industrial, data center and telecommunication applications, which has been a notable development.
The launch of the AirLink XR60 5G Router Solution, a new networking technology created to provide 5G and Wi-Fi 6 performance in a small and durable design for highly demanding environments, is also noteworthy.
SMTC’s cost-effective Fiber-to-the-room (FTTR) deployments through its latest PON-X solutions, the GN25L81 2.5G combo chip and the GN25L42 2.5G burst mode PIN trans-impedance amplifier (Super TIA) devices for 2.5G PON FTTR Optical Line Terminal applications further expands portfolio.
Expanding portfolio bodes well for Semtech’s top-line growth. It expects net sales in the infrastructure end market to increase sequentially, driven by strong demand for data center applications for the third quarter of fiscal 2025. SMTC also expects industrial net sales to be slightly up.
SMTC’s Q3 Guidance Positive
For third-quarter fiscal 2025, SMTC expects net sales to be $233 million (+/- $5 million). The Zacks Consensus Estimate for the same is pegged at $232.59 million, suggesting year-over-year growth of 15.78%.
The non-GAAP gross margin is expected to be 52% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 17.2% (+/- 80 bps).
The non-GAAP earnings are expected to be 23 cents (+/- 3 cents) per share. The consensus mark for earnings is pegged at 24 cents per share, up 14.3% over the past 30 days.
Zacks Ranks and Valuation
Semtech’s shares are overvalued at this moment, as suggested by a Value Score of F.
SMTC currently carries a Zacks Rank #3 (Hold), implying that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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