News

Semtech Corporation SMTC is scheduled to report third-quarter fiscal 2025 results on Nov. 25.

For the fiscal third quarter, Semtech anticipates revenues to be $233 million (+/- 5 million). The Zacks Consensus Estimate for revenues is pegged at $232.6 million, indicating a rise of 15.8% from the year-ago quarter.

SMTC anticipates non-GAAP earnings per share to be 23 cents (+/- 3 cents per share). The consensus mark for the same is pegged at 24 cents, unchanged over the past 60 days, indicating a robust improvement from the year-ago quarter’s earnings of 2 cents.

In the trailing four quarters, Semtech's earnings surpassed the Zacks Consensus Estimate thrice while missing once, the average surprise being 34%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Factors to Consider for SMTC

Semtech’s fiscal third-quarter performance is likely to have benefited from strength across its infrastructure and high-end-consumer end markets.Similarly, the wireless end-market is likely to have witnessed strong growth owing to SMTC’s increasing 5G offerings and expansion of its distribution footprint in Canada with GetWireless, one of the leading distributors of cellular solutions that connect the Internet of Things.

Strong Momentum across its Signal Integrity and Analog Mixed Signal & Wireless product lines are expected to have contributed well. The growing adoption of artificial intelligence might have been a plus for the upcoming quarter.

Semtech Corporation Price and EPS Surprise

Semtech Corporation price-eps-surprise | Semtech Corporation Quote

Growing traction across hyperscale data center applications on the back of Tri-Edge and FiberEdge transimpedance amplifier products is expected to have aided SMTC’s performance in the to-be-reported quarter.

Robust demand for the company’s passive optical network (PON) products is likely to have continued driving revenue growth in the fiscal third quarter. The launch of the 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 (OLT) applications are likely to have generated impressive third-quarter performance.

The increasing demand for LoRa devices and LoRaWAN standards is expected to have contributed positively to top-line growth in the to-be-reported quarter. The availability of its one-channel LoRaWAN hub reference design and evaluation kit targeting smaller-scale network deployments, such as for SMB/SME and smart home applications, is anticipated to impact its third-quarter results positively.

However, Macroeconomic challenges, including the protracted inflationary conditions and still-high interest rates are likely to have posed challenges for the company in the fiscal third quarter. Additionally, escalating tensions between the United States and China might have raised concerns. Softness in the industrial end-market and Connectivity segment is expected to have been a major negative.

What Our Proven Model Says for SMTC’s Q3 Earnings

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Semtech has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

NVIDIA NVDA has an Earnings ESP of +1.30% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVDA’s shares have skyrocketed 196.8% year to date. It is slated to report its third-quarter 2024 results on Nov. 20.

The Zacks Consensus Estimate for NVDA’s third-quarter 2024 earnings is pegged at 75 cents per share, up by a penny over the past 60 days. This suggests a rise of 87.5% from the year-ago quarter’s reported figure.

Nutanix NTNX has an Earnings ESP of +1.64% and carries a Zacks Rank #2 at present.

NTNX shares have gained 43.5% year to date. It is set to report first-quarter fiscal 2025 results on Nov 26.

The Zacks Consensus Estimate for NTNX’s first-quarter fiscal 2025 earnings is pegged at 31 cents per share, up by couple of pennies penny over the past 60 days, indicating an improvement of 7% from the year-ago quarter’s reported figure.

Hewlett Packard HPE has an Earnings ESP of +1.51% and carries a Zacks Rank #3 at present.

HPE shares have surged 26.8% year to date. It is set to report fourth-quarter results on Dec 5.

The Zacks Consensus Estimate for HPE’s fourth-quarter 2024 earnings is pegged at 55 cents per share, unchanged over the past 60 days, indicating an improvement of 5.8% from the year-ago quarter’s reported figure.

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