Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Semtech Corporation (NASDAQ: SMTC) is a supplier of analog and mixed-signal semiconductor products and advanced algorithms. A variety of commercial products are designed, developed, and marketed by the company. These products are distributed to end markets in the corporate computer, communications, consumer, commercial, and industrial sectors. Signal Integrity, Wireless and Sensing, and Protection make up the company's three operating segments.

Kalkine’s American Technology Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 33.18% in the last six months as well as by 65.62% in the past nine months.
• The stock is leaning towards its lower band of its 52-week range of USD 65.51 and 52-week low price of USD 17.82. Post the announcement of FY23 results the stock has corrected by around 41.50%.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA , with the current oversold RSI of around 29.49.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

Over the past five years, SMTC has been able to sustain an upward trend in both revenue and gross profit, resulting in positive operating cash flows and the generation of positive free cash flows during the same period.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~51.65% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~11.63% and ~11.40%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY23:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

  Stock Performance:

• The stock has corrected by 33.18% in the last six months as well as by 65.62% in the past nine months.
• The stock is leaning towards its lower band of its 52-week range of USD 65.51 and 52-week low price of USD 17.82. Post the announcement of FY23 results the stock has corrected by around 41.50% with an expectations of an upside from the important support of USD 15.00-USD 17.00.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA , with the current oversold RSI of around 29.49.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 13, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.