Semtech (NASDAQ:SMTC) Shares Decline 7.3% - Is It Time to Sell?

Semtech Corporation (NASDAQ:SMTC) experienced a significant drop in its stock price, trading down by 7.3% during the mid-day session on Thursday. The stock hit a low of $62.51 before recovering slightly to $61.59, with a total volume of 117,649 shares traded. This represents a staggering 94% decrease compared to its average trading volume of 1,883,683 shares. Prior to this decline, Semtech closed at $66.46.

Recent Analyst Updates

Several investment analysts have recently shared their insights on Semtech's stock performance. Notably, on November 26th, Benchmark increased their price target for Semtech from $56.00 to $82.00, while rating it as a "buy". Susquehanna also updated their price target from $55.00 to $60.00 on November 21st, indicating a "positive" outlook for the stock. Northland Securities raised their target price from $60.00 to $66.00, coupled with an "outperform" rating on December 10th. Additionally, Needham & Company LLC upped their target from $70.00 to $74.00, maintaining a "buy" stance on December 12th. Stifel Nicolaus also raised their price target from $65.00 to $75.00 on January 6th. Currently, three analysts have a hold rating on the stock while eleven have given it a buy rating, leading to a consensus rating of "Moderate Buy" with an average price target of $72.00 according to MarketBeat.com.

Performance Metrics

Semtech has shown fluctuating performance recently, with a 50-day moving average price of $65.85 and a longer-term 200-day moving average of $50.49. The company, which holds a market capitalization of $4.13 billion, has a price-to-earnings ratio of -4.18 and a price-to-earnings growth ratio of 2.98. Furthermore, its stock has a beta of 1.64, indicating significant volatility compared to the broader market.

On November 25th, Semtech reported its latest quarterly earnings. The semiconductor firm posted an earnings per share (EPS) of $0.26, surpassing the analyst consensus estimate of $0.23 by $0.03. The quarterly revenue was recorded at $236.80 million, exceeding the forecast of $232.89 million, and reflecting a year-over-year increase of 17.9% over the same quarter from the previous year, which had only $0.02 EPS.

Insider Trading Activity

Recent insider transactions have also come to light. Asaf Silberstein, the Chief Operating Officer, sold 2,000 shares at an average price of $70.00 on January 15th, totaling $140,000. After this sale, he still holds approximately 76,417 shares valued at around $5,349,190, marking a 2.55% reduction in his holdings. Another insider, Imran Sherazi, who is a Senior Vice President, sold 1,338 shares on January 17th at an average price of $75.00, resulting in a transaction value of $100,350. Following this transaction, he retains just 14 shares, signifying a drastic 98.96% decrease in his position. Over the last 90 days, insiders sold 16,747 shares worth $1,095,061, and corporate insiders own around 0.60% of Semtech's total stock.

Institutional Investor Activity

Recent changes in stake ownership have been noted among large institutional investors. Huntington National Bank increased its shares in Semtech by 105.2% during the third quarter, owning a total of 589 shares valued at $27,000 after acquiring an additional 302 shares. GAMMA Investing LLC also increased their holdings by 15.3% in the fourth quarter, now possessing 3,166 shares valued at $196,000 after buying an extra 421 shares. Moreover, Hanseatic Management Services Inc. has boosted its position by 3.2% during the same quarter, owning 14,406 shares worth $658,000 after purchasing 447 more. Additionally, Smartleaf Asset Management LLC raised its stake by 190.6% in the fourth quarter. Lastly, Creative Planning has also shown a 3.4% increase in its holdings, now having 18,018 shares valued at $538,000 after acquiring an additional 588 shares.

About Semtech Corporation

Semtech Corporation is engaged in the design, development, manufacture, and marketing of analog and mixed-signal semiconductor products alongside advanced algorithms. The company offers a variety of signal integrity products, including those for optical data communications and video transport. Its extensive portfolio includes integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications. Additionally, Semtech produces video products for broadcast applications, as well as video-over-IP technology for professional audio and video solutions.

Conclusion

With the recent downturn in stock price and mixed signals from analysts and institutional investors alike, Semtech's stock performance will be under scrutiny. Potential investors are encouraged to assess their risk tolerance and market conditions before making any decisions regarding their investments in Semtech.

Semtech, Stock, Earnings