Value
4.4/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 2.4 |
| Fwd P/E | 3.0 |
| PEG | 5.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 34.8x
- ▸PEG: 1.53
SMTC · Why this verdict
Why Semtech (SMTC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 44.9x and a PEG of 1.98, the stock is expensive relative to its growth rate, leaving little room for valuation multiple expansion and significant downside if growth disappoints. Valuation breakdown | Revenue growth accelerates to at least 20% year-over-year, compressing the PEG ratio to below 1.5 and justifying the current multiple. | →Stable |
| CounterSemiconductor companies often carry elevated multiples during growth phases and the strong Piotroski F-Score of 8/9 reflects underlying business quality that may warrant a premium. | ||
Semtech has beaten analyst earnings estimates in 3 of the last 4 quarters with an average positive surprise of 6.1%, demonstrating consistent execution above Wall Street expectations. Earnings | The beat streak extends to 4 of 5 over the next 12 months, with average EPS surprises remaining above 5%. | →Stable |
| CounterThe stock already trades near analyst targets, suggesting the market has fully priced in the beat streak and forward execution must exceed even elevated post-beat expectations. | ||
With only 2.2% upside to the analyst consensus price target of $178 and an asymmetry ratio of 0.15 against a 7% downside risk, the risk-reward at current prices is deeply unfavorable for new entry. Targets | Analysts raise price targets above $200, restoring at least 15% upside, over the next 12 months as revenue growth accelerates. | →Stable |
| CounterIf the company continues to beat estimates and analysts raise their targets, the current price may simply be the new floor rather than a ceiling. | ||
The stock trades above its 200-day moving average with rising on-balance volume accumulation, indicating institutional buying interest and a positive intermediate-term price trend. Momentum breakdown | The stock maintains its position above the 200-day moving average for at least 9 of the next 12 months. | →Stable |
| CounterThe stock is near its 52-week high with only 1.7% remaining before hitting that ceiling, increasing the risk of a reversal as near-term momentum runs out of room. | ||
At a forward P/E of 44.9x and a PEG of 1.98, the stock is expensive relative to its growth rate, leaving little room for valuation multiple expansion and significant downside if growth disappoints.
→StableValuation breakdown
- Expectation
- Revenue growth accelerates to at least 20% year-over-year, compressing the PEG ratio to below 1.5 and justifying the current multiple.
CounterSemiconductor companies often carry elevated multiples during growth phases and the strong Piotroski F-Score of 8/9 reflects underlying business quality that may warrant a premium.
Semtech has beaten analyst earnings estimates in 3 of the last 4 quarters with an average positive surprise of 6.1%, demonstrating consistent execution above Wall Street expectations.
→StableEarnings
- Expectation
- The beat streak extends to 4 of 5 over the next 12 months, with average EPS surprises remaining above 5%.
CounterThe stock already trades near analyst targets, suggesting the market has fully priced in the beat streak and forward execution must exceed even elevated post-beat expectations.
With only 2.2% upside to the analyst consensus price target of $178 and an asymmetry ratio of 0.15 against a 7% downside risk, the risk-reward at current prices is deeply unfavorable for new entry.
→StableTargets
- Expectation
- Analysts raise price targets above $200, restoring at least 15% upside, over the next 12 months as revenue growth accelerates.
CounterIf the company continues to beat estimates and analysts raise their targets, the current price may simply be the new floor rather than a ceiling.
The stock trades above its 200-day moving average with rising on-balance volume accumulation, indicating institutional buying interest and a positive intermediate-term price trend.
→StableMomentum breakdown
- Expectation
- The stock maintains its position above the 200-day moving average for at least 9 of the next 12 months.
CounterThe stock is near its 52-week high with only 1.7% remaining before hitting that ceiling, increasing the risk of a reversal as near-term momentum runs out of room.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Semtech has delivered earnings beats in 3 of its last 4 quarters, trades above its 200-day moving average with rising volume accumulation, but the stock has already reached analyst price targets with only 2.2% upside remaining — creating an unfavorable entry point despite solid execution momentum.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.3 |
| Gross margin | 6.5 |
| Op margin | 3.7 |
| Net margin | 0.0 |
| Current ratio | 8.1 |
| FCF quality | 5.4 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸FCF-positive but moderate margins (FCF margin 12%, FCF yield 1.1%)
- ▸Strong Piotroski F-Score: 8/9
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 6.5 |
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 2.7 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 8.4 |
| Price target | 9.6 |
- ▸Analyst upside: 52%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $3,552,871 (0.028% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 1.9 |
| growth rank | 3.8 |
Technical
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.0 |
| 52w position | 5.3 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 9.0 |
| volatility | 0.0 |
| put call | 9.4 |
| implied vol | 0.0 |
| beta | 2.3 |
| debt equity | 5.6 |
- ▸High IV: 110%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.6 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (6)
- ASYMMETRY:2.1>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:52d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.1<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.13
Upside
+32.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.32>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.1<4.5) reinforce the read. Current asymmetry R:R is 2.13 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 8.1, Technical at 8.1, and Catalyst at 6.7; the weakest are Peer rank at 2.7, Momentum at 3.1, and Insider at 3.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Execution Three Consecutive Beats
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, signaling the execution edge has deteriorated.
- P2Target Reached Limited Near Term Upside
Trip ifAnalyst consensus price target rises above $210, restoring at least 20% upside from current levels above $174.
- P3Expensive Valuation At Cycle High
Trip ifForward P/E remains above 40x while revenue growth falls below 10% year-over-year for 2 consecutive quarters.
- P4Above 200ma Positive Technical Trend
Trip ifPrice drops below $155, more than 11% below the current $174, confirming a break below the 200-day moving average support.