Critical Comparison: Semtech (SMTC) and Its Peers

Semtech (NASDAQ:SMTC) is one of 221 public companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it weigh in compared to its competitors? We will compare Semtech to related companies based on the strength of its valuation, institutional ownership, analyst recommendations, earnings, dividends, risk and profitability.

Profitability

This table compares Semtech and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Semtech	13.11%	21.74%	8.98%
Semtech Competitors	-1,280.34%	-126.29%	-3.97%

Institutional & Insider Ownership

54.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by institutional investors. 0.4% of Semtech shares are held by company insiders. Comparatively, 11.5% of shares of all “Semiconductors & Semiconductor Equipment” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Semtech and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Semtech	0	3	15	1	2.89
Semtech Competitors	3489	12311	25721	993	2.57

Semtech currently has a consensus price target of $213.11, indicating a potential upside of 89.97%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 43.57%. Given Semtech’s stronger consensus rating and higher probable upside, equities analysts clearly believe Semtech is more favorable than its competitors.

Valuation and Earnings

This table compares Semtech and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Semtech	$1.05 billion	-$40.38 million	74.29
Semtech Competitors	$7.33 billion	$2.49 billion	8.05

Semtech’s competitors have higher revenue and earnings than Semtech. Semtech is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Semtech has a beta of 2.5, meaning that its stock price is 150% more volatile than the S&P 500. Comparatively, Semtech’s competitors have a beta of 2.80, meaning that their average stock price is 180% more volatile than the S&P 500.

Summary

Semtech beats its competitors on 8 of the 13 factors compared.

About Semtech

Semtech Corporation designs, develops, manufactures, and markets analog and mixed-signal semiconductor and advanced algorithms. It provides signal integrity products, including a portfolio of optical data communications and video transport products used in various infrastructure, and industrial applications; a portfolio of integrated circuits for data centers, enterprise networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company offers protection products, such as filter and termination devices that are integrated with the transient voltage suppressor devices, which protect electronic systems from voltage spikes; and sensing products comprising a portfolio of specialized radio frequency products used in various industrial, medical, and communications applications, as well as specialized sensing products. In addition, it provides switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging related products. Further, it offers portfolio of IoT solutions, such as modules, gateways, routers, and connected services; and portfolio of connected services, including wireless connectivity and cloud-based services for industrial, medical and communications applications. The company serves original equipment manufacturers and industrial end-markets. It sells its products directly, as well as through independent sales representative firms and independent distributors in Asia- Pacific, North America, and Europe. Semtech Corporation was incorporated in 1960 and is headquartered in Camarillo, California.