Value
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 0.0 |
| Fwd P/E | 1.9 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 59.1x
- ▸PEG: 0.18
LSCC · Why this verdict
Why Lattice Semiconductor Corporati (LSCC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 42% year-over-year, a growth rate that, if sustained, can support elevated multiples and generate substantial shareholder value over a multi-year horizon. Growth breakdown | Revenue growth stays above 25% year-over-year for the next two reporting periods, confirming that demand momentum is durable rather than a one-period spike. | →Stable |
| CounterThree of the last four earnings quarters came in at or barely above estimates with no material upside, suggesting growth is tracking consensus forecasts rather than outpacing them — a dynamic that limits the potential for a positive re-rating on delivery alone. | ||
With 83% of sales derived from foreign markets and 84% of revenue flowing through distributor channels, the business faces meaningful disruption risk if geopolitical friction tightens export access or if a major distributor relationship deteriorates. Bear case | Concentration risk abates if distributor channel share falls below 60% of total revenue, signaling meaningful expansion of direct-to-customer reach. | →Stable |
| CounterHeavy distributor reliance also provides broad geographic reach and rapid channel scalability that would be costly to replicate through direct sales, and international market exposure aligns with where semiconductor investment is concentrated globally. | ||
Free cash flow converts at 595% of net income, the Rule of 40 score stands at 63 — described as elite — and a Piotroski financial health score of 8 out of 9 confirms that the business is generating real cash far in excess of reported earnings. Quality breakdown | The free-cash-flow-to-net-income ratio stays above 200% over the next four quarters, confirming that the cash conversion quality is structural rather than a single-period benefit. | →Stable |
| CounterA very high free-cash-flow-to-net-income ratio can reflect temporarily low capital spending during a trough period or favorable working-capital timing rather than a durable structural advantage; if the growth cycle accelerates and requires meaningful reinvestment, that ratio may normalize sharply. | ||
At a forward P/E of 64.5 times earnings, the stock screens as expensive, and the current price has already exceeded the near-term resistance target, leaving the risk/reward unfavorable with downside risk outpacing any remaining upside at this level. Valuation breakdown | This concern resolves if the forward P/E compresses below 40 times as earnings growth catches up to the current price, restoring a more balanced risk/reward. | →Stable |
| CounterA business compounding revenue at 42% with elite cash conversion may sustain an elevated multiple for an extended period, and the low PEG of 0.19 suggests the growth trajectory is not fully captured by the headline price-to-earnings figure alone. | ||
Revenue grew 42% year-over-year, a growth rate that, if sustained, can support elevated multiples and generate substantial shareholder value over a multi-year horizon.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 25% year-over-year for the next two reporting periods, confirming that demand momentum is durable rather than a one-period spike.
CounterThree of the last four earnings quarters came in at or barely above estimates with no material upside, suggesting growth is tracking consensus forecasts rather than outpacing them — a dynamic that limits the potential for a positive re-rating on delivery alone.
With 83% of sales derived from foreign markets and 84% of revenue flowing through distributor channels, the business faces meaningful disruption risk if geopolitical friction tightens export access or if a major distributor relationship deteriorates.
→StableBear case
- Expectation
- Concentration risk abates if distributor channel share falls below 60% of total revenue, signaling meaningful expansion of direct-to-customer reach.
CounterHeavy distributor reliance also provides broad geographic reach and rapid channel scalability that would be costly to replicate through direct sales, and international market exposure aligns with where semiconductor investment is concentrated globally.
Free cash flow converts at 595% of net income, the Rule of 40 score stands at 63 — described as elite — and a Piotroski financial health score of 8 out of 9 confirms that the business is generating real cash far in excess of reported earnings.
→StableQuality breakdown
- Expectation
- The free-cash-flow-to-net-income ratio stays above 200% over the next four quarters, confirming that the cash conversion quality is structural rather than a single-period benefit.
CounterA very high free-cash-flow-to-net-income ratio can reflect temporarily low capital spending during a trough period or favorable working-capital timing rather than a durable structural advantage; if the growth cycle accelerates and requires meaningful reinvestment, that ratio may normalize sharply.
At a forward P/E of 64.5 times earnings, the stock screens as expensive, and the current price has already exceeded the near-term resistance target, leaving the risk/reward unfavorable with downside risk outpacing any remaining upside at this level.
→StableValuation breakdown
- Expectation
- This concern resolves if the forward P/E compresses below 40 times as earnings growth catches up to the current price, restoring a more balanced risk/reward.
CounterA business compounding revenue at 42% with elite cash conversion may sustain an elevated multiple for an extended period, and the low PEG of 0.19 suggests the growth trajectory is not fully captured by the headline price-to-earnings figure alone.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Lattice Semiconductor is growing revenue at 42% year-over-year with a Rule of 40 score of 63 and free cash flow converting at 595% of net income, but the stock trades at a forward P/E of 64.5 times with the price already above the near-term resistance target and a negative risk/reward ratio — the business quality is genuine but current prices do not offer a sound entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.9 |
| ROA | 1.7 |
| Gross margin | 9.7 |
| Op margin | 6.2 |
| Net margin | 1.7 |
| Current ratio | 9.5 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 595% FCF/NI
- ▸Rule of 40: 63 (elite)
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 42% YoY
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 4.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.1 |
| erm sentiment | 5.0 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $3,945,046 (0.021% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 3.7 |
| growth rank | 7.2 |
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 7.5 |
| 52w position | 7.4 |
Risk (lower is worse)
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.0 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 3.3 |
| implied vol | 0.0 |
| beta | 4.0 |
| debt equity | 0.0 |
- ▸High IV: 96%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (2)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.43
Upside
-6.4%
Downside
14.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.79>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.43 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Technical at 7.6, and Quality at 6.5; the weakest are Risk (lower is worse) at 3.1, Value at 3.2, and Peer rank at 3.7. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Revenue Growth
Trip ifRevenue growth falls below 20% year-over-year for 2 consecutive quarters.
- P2Elite Cash Generation Quality
Trip ifFree-cash-flow-to-net-income ratio falls below 100% for 2 consecutive quarters.
- P3Stretched Valuation Above Target
Trip ifForward P/E compresses below 40 times for 2 consecutive quarters, eliminating the stretched-valuation concern.
- P4Dual Customer Geographic Concentration
Trip ifDistributor channel share falls below 60% of total revenue for 2 consecutive quarters.