# Semtech (SMTC.US)

Canonical: https://gigainvestors.com/s/SMTC

Analysis as of: 2026-10-16T07:31:59.339Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $144.21 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 3

- Operating margin variation: 0.56×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.11×

- FY2018: 0.14×

- FY2019: 0.14×

- FY2020: 0.09×

- FY2021: 0.13×

- FY2022: 0.19×

- FY2023: 0.21×

- FY2024: -0.04×

- FY2025: 0.07×

- FY2026: 0.13×

### moat: fail

- Recent gross margin fell 5.4pp below the typical margin (limit 4pp)

- ROIC, median of available years: 21.3%

- ROIC, second-lowest year: 12.1%

- Typical minus recent gross margin: 5.4 pp

- Typical gross margin (annual median): 55.5%

- Recent gross margin (lower of latest and 3-year median): 50.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.7%

- ROIC including acquisitions, ten-year median: 8.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 20.6%

- FY2018: 21.3%

- FY2019: 38.3%

- FY2020: 15.8%

- FY2021: 27.0%

- FY2022: 44.8%

- FY2023: 21.2%

- FY2024: -7.0%

- FY2025: 12.1%

- FY2026: 26.8%

### economics: fail

- owner earnings cash conversion below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: -$965M

- Net income, five-year total: -$1.1B

- Return on incremental invested capital: 744.4%

- Working capital / revenue, annual change: 2.3 pp

- Working capital / revenue, change between three-year averages: 15.3 pp

- Working capital / revenue, final three-year average: 30.1%

Chart: Owner earnings · five years; fiscal year observations.

- FY2022: $135M

- FY2023: $70M

- FY2024: -$1.0B

- FY2025: -$127M

- FY2026: -$3.9M

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 21.3% vs 12.1%

- Per-share earnings: 0.54 to -2.26 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 3.0%

- Ordinary dilution, 5-year annual growth: 6.0%

- Market cap gain: $5.2B

- Cumulative retained earnings: -$904M

- Diluted shares, 10-year annual growth: 3.0%

- Diluted shares, 5-year annual growth: 6.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value change: -$2.80

- Per-share value, starting three-year median: $0.54

- Per-share value, ending three-year median: -$2.26

- Buybacks concentrated in cheaper years (correlation): 0.17

- Average buyback yield: 1.9%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: $1.3B

- Cumulative net income, 10 years: -$855M

- ROIC, first three-year median: 21.3%

- ROIC, last three-year median: 12.1%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.83

- FY2018: $0.54

- FY2019: $1.02

- FY2020: $0.47

- FY2021: $0.91

- FY2022: $1.92

- FY2023: $0.96

- FY2024: -$17.03

- FY2025: -$2.26

- FY2026: -$0.46

### accounting: fail

- restructuring or one-time charges in at least three of five years

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -15.7%

- Receivables to sales index (DSRI): 0.90×

- Restructuring years, last five: 4

- Stock compensation / operating cash flow: 31.9%

- Earnings backed by cash: Yes

- Accounting red flags: 2

- Goodwill and intangibles / equity: 0.91×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -6.2%

- FY2018: -6.4%

- FY2019: -10.7%

- FY2020: -8.2%

- FY2021: -5.5%

- FY2022: -6.8%

- FY2023: -2.5%

- FY2024: -72.7%

- FY2025: -15.5%

- FY2026: -15.7%

## Holders

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Up 933% since Oct 2023 · "Semtech targets $266M Q3 net sales as data center and LoRa momentum accelerate" (seekingalpha.com, Aug 2025) · sales +15.5%

Story as of 2026-10-16T09:59:36.065Z; price observation 2026-10-15.

- 2025-05-27: Semtech (NASDAQ:SMTC) Reports Q1 In Line With Expectations But Quarterly Revenue Guidance Misses Expectations ([finance.yahoo.com](https://finance.yahoo.com/news/semtech-nasdaq-smtc-reports-q1-202100984.html))

- 2025-08-26: Semtech targets $266M Q3 net sales as data center and LoRa momentum accelerate ([seekingalpha.com](https://seekingalpha.com/news/4489008-semtech-targets-266m-q3-net-sales-as-data-center-and-lora-momentum-accelerate?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-09-30: Semtech upgraded at Oppenheimer on AI data center and IoT growth bets ([finance.yahoo.com](https://finance.yahoo.com/news/semtech-upgraded-oppenheimer-ai-data-141903737.html))

- 2025-11-25: Semtech anticipates Q4 data center sales to rise 10% as portfolio expansion continues ([seekingalpha.com](https://seekingalpha.com/news/4525663-semtech-anticipates-q4-data-center-sales-to-rise-10-percent-as-portfolio-expansion-continues?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-05-27: Semtech forecasts $328M Q2 revenue as it targets 35% sequential data center growth ([seekingalpha.com](https://seekingalpha.com/news/4597199-semtech-forecasts-328m-q2-revenue-as-it-targets-35-percent-sequential-data-center-growth?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-08-25: Semtech surges on strong Q2 beat and upbeat Q3 guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/semtech-surges-strong-q2-beat-204209240.html))

### Sales · FY2025–2026

sales +15.5%; source https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm; observed 2026-03-23.

- FY2017: $544M 

- FY2018: $588M 

- FY2019: $627M 

- FY2020: $548M 

- FY2021: $595M 

- FY2022: $741M 

- FY2023: $757M 

- FY2024: $869M 

- FY2025: $909M 

- FY2026: $1.1B 

### Gross margin · FY2026

gross margin 51.6%; source https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm; observed 2026-03-23.

- FY2017: 55.0% 

- FY2018: 55.1% 

- FY2019: 55.9% 

- FY2020: 58.5% 

- FY2021: 59.7% 

- FY2022: 62.2% 

- FY2023: 63.3% 

- FY2024: 43.0% 

- FY2025: 50.1% 

- FY2026: 51.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductors; annual sales are USD 1.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm (filed 2026-03-23); FY2026: revenue 1050000000; grossProfit 541600000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SMTC.US: Semtech Corporation provides semiconductor, Internet of Things systems, and cloud connectivity service solutions in the Asia- Pacific, North America, and Europe. The company operates in three segments: Signal Integrity, Analog Mixed Signal and Wireless, and IoT Systems and Connectivity. It provides signal integrity products, including a portfolio of optical and copper 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 interface applications; and video products for broadcast applications, as well as video-over-IP technology for professional audio video applications. The company also offers analog mixed signal and wireless products; protection devices, such as filter and termination devices which protect electronic systems from voltage spikes; and designs, develops, manufactures, and markets radio frequency products used in 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, the company offers a portfolio of IoT systems and connectivity solutions, such as modules, gateways, routers, and connected services, including wireless connectivity and cloud-based services for industrial, medical, and communications applications. It serves original equipment manufacturers, solution providers, commercial applications, infrastructure, high-end consumer, and industrial end markets. The company sells its products through direct sales personnel, independent sales representative firms, and independent distributors. Semtech Corporation was incorporated in 1960 and is headquartered in Camarillo, California.

### Why customers stay

Margins ranged from 43% to 51.6% during 2024–26; it earns 21.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2024: grossProfit / revenue = 43%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2025: grossProfit / revenue = 50.1%.

- Source: https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm (filed 2026-03-23); FY2026: grossProfit / revenue = 51.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); 10-year return on capital observations [[2017,0.2058998530959854],[2018,0.2134307888977606],[2019,0.3831311014224125],[2020,0.15752373296507113],[2021,0.26970297542680355],[2022,0.4482279398670187],[2023,0.21192094772127493],[2024,-0.06984945879815867],[2025,0.12109266939854725],[2026,0.2679386968122241]]; median 0.21267586830951776. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 3 of 10 years; bought back USD 217.8 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2017: growth capex 0; upkeep 32920000; cash acquisitions 0; owner earnings 68798000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2018: growth capex 0; upkeep 35461000; owner earnings 49964000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2019: growth capex 0; upkeep 17052000; cash acquisitions 15948000; owner earnings 102226000. Growth capex plus acquisitions / owner earnings = 0.1560072779919003.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2020: growth capex 0; upkeep 23056000; cash acquisitions 0; owner earnings 48396000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2021: growth capex 0; upkeep 32734000; cash acquisitions 0; owner earnings 63027000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2022: growth capex 0; upkeep 26181000; cash acquisitions 0; owner earnings 134785000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2023: growth capex 0; upkeep 28323000; cash acquisitions 1240757000; owner earnings 69950000. Growth capex plus acquisitions / owner earnings = 17.737769835596854.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,6002000],[2021,8499000],[2022,5277000],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm (filed 2026-03-23); FY2026: cash repurchases 217761000 USD.

### Are managers owners

Insiders own 0.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SMTC.US SharesStats.PercentInsiders = 0.77 percentage points; cache date 2026-10-16.

### What the price says

The price is 12.1 times annual sales; cash earnings are negative.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); Closing price 144.21 USD; reporting-to-trading FX 1; FY2026 annual sales per share 11.881322560934212; price multiple 12.137537657142857. FY2026 cash earnings/share -0.04361011157127662. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $24.20 per share

- 2016-11: $28.10 per share

- 2016-12: $31.55 per share

- 2017-01: $32.95 per share

- 2017-02: $33.45 per share

- 2017-03: $33.80 per share

- 2017-04: $34.15 per share

- 2017-05: $38.20 per share

- 2017-06: $35.75 per share

- 2017-07: $39.60 per share

- 2017-08: $37.60 per share

- 2017-09: $37.55 per share

- 2017-10: $41.05 per share

- 2017-11: $34.05 per share

- 2017-12: $34.20 per share

- 2018-01: $35.80 per share

- 2018-02: $33.65 per share

- 2018-03: $39.05 per share

- 2018-04: $39.30 per share

- 2018-05: $48.40 per share

- 2018-06: $47.05 per share

- 2018-07: $47.45 per share

- 2018-08: $59.75 per share

- 2018-09: $55.60 per share

- 2018-10: $44.94 per share

- 2018-11: $53.34 per share

- 2018-12: $45.87 per share

- 2019-01: $48.56 per share

- 2019-02: $55.04 per share

- 2019-03: $50.91 per share

- 2019-04: $53.87 per share

- 2019-05: $39.83 per share

- 2019-06: $48.05 per share

- 2019-07: $52.87 per share

- 2019-08: $41.97 per share

- 2019-09: $48.61 per share

- 2019-10: $50.46 per share

- 2019-11: $48.46 per share

- 2019-12: $52.90 per share

- 2020-01: $48.19 per share

- 2020-02: $39.49 per share

- 2020-03: $37.50 per share

- 2020-04: $45.24 per share

- 2020-05: $53.18 per share

- 2020-06: $52.22 per share

- 2020-07: $55.73 per share

- 2020-08: $58.65 per share

- 2020-09: $52.96 per share

- 2020-10: $54.89 per share

- 2020-11: $67.47 per share

- 2020-12: $72.09 per share

- 2021-01: $70.95 per share

- 2021-02: $73.31 per share

- 2021-03: $69.00 per share

- 2021-04: $67.74 per share

- 2021-05: $63.00 per share

- 2021-06: $68.80 per share

- 2021-07: $61.91 per share

- 2021-08: $69.92 per share

- 2021-09: $77.97 per share

- 2021-10: $85.03 per share

- 2021-11: $85.67 per share

- 2021-12: $88.93 per share

- 2022-01: $71.10 per share

- 2022-02: $69.38 per share

- 2022-03: $69.34 per share

- 2022-04: $59.60 per share

- 2022-05: $64.09 per share

- 2022-06: $54.97 per share

- 2022-07: $62.33 per share

- 2022-08: $46.19 per share

- 2022-09: $29.41 per share

- 2022-10: $27.69 per share

- 2022-11: $30.74 per share

- 2022-12: $28.69 per share

- 2023-01: $33.03 per share

- 2023-02: $30.81 per share

- 2023-03: $24.14 per share

- 2023-04: $19.49 per share

- 2023-05: $21.74 per share

- 2023-06: $25.46 per share

- 2023-07: $29.20 per share

- 2023-08: $26.15 per share

- 2023-09: $25.75 per share

- 2023-10: $13.96 per share

- 2023-11: $16.37 per share

- 2023-12: $21.91 per share

- 2024-01: $19.84 per share

- 2024-02: $21.20 per share

- 2024-03: $27.49 per share

- 2024-04: $37.62 per share

- 2024-05: $38.89 per share

- 2024-06: $29.88 per share

- 2024-07: $31.72 per share

- 2024-08: $43.82 per share

- 2024-09: $45.66 per share

- 2024-10: $44.19 per share

- 2024-11: $64.04 per share

- 2024-12: $61.85 per share

- 2025-01: $66.96 per share

- 2025-02: $38.19 per share

- 2025-03: $34.40 per share

- 2025-04: $31.25 per share

- 2025-05: $37.33 per share

- 2025-06: $45.14 per share

- 2025-07: $51.10 per share

- 2025-08: $58.09 per share

- 2025-09: $71.45 per share

- 2025-10: $67.86 per share

- 2025-11: $74.16 per share

- 2025-12: $73.69 per share

- 2026-01: $79.75 per share

- 2026-02: $90.22 per share

- 2026-03: $76.89 per share

- 2026-04: $105.05 per share

- 2026-05: $152.54 per share

- 2026-06: $161.85 per share

- 2026-07: $117.82 per share

- 2026-08: $132.96 per share

- 2026-09: $178.35 per share

- 2026-10: $144.21 per share

## Annual estimated value (USD per share)

- FY2017: low $13.03 per share, central $14.23 per share, high $15.83 per share

- FY2018: low $12.46 per share, central $13.57 per share, high $15.06 per share

- FY2019: low $14.05 per share, central $15.39 per share, high $17.17 per share

- FY2020: low $12.77 per share, central $13.96 per share, high $15.53 per share

- FY2021: low $14.32 per share, central $15.76 per share, high $17.67 per share

- FY2022: low $17.12 per share, central $18.92 per share, high $21.32 per share

- FY2023: low $17.40 per share, central $19.66 per share, high $22.30 per share

- FY2024: low $15.65 per share, central $17.54 per share, high $20.05 per share

- FY2025: low $14.88 per share, central $16.65 per share, high $19.00 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/88941/000008894126000005/smtc-20260125.htm); period 2026-01-25, filed 2026-03-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.