Semtech Corporation Expects Strong First-Quarter Fiscal 2026 Results

Semtech Corporation (SMTC) will release its first-quarter fiscal 2026 results after the market closes on May 27.

For this quarter, Semtech projects net sales of approximately $250 million, with a margin of +/- $5 million, representing a 21% increase year-over-year. The Zacks Consensus Estimate for revenues stands at $249.79 million, an increase of 21.20% compared to the same period last year.

The company anticipates non-GAAP earnings per share to be around 37 cents, with a margin of +/- 3 cents. The consensus estimate remains steady at 38 cents, indicating an impressive year-over-year improvement of 533%.

Key Factors Impacting Semtech’s Performance

Semtech’s first-quarter fiscal performance likely benefited from robust demand in its infrastructure and high-end consumer markets. Additionally, the wireless sector is expected to show notable growth, driven by the company’s expanding 5G portfolio. Continued growth of FiberEdge and Tri-Edge products, especially for 400G/800G modules, should positively influence revenue for the quarter.

Price and EPS Surprise Analysis

Strong momentum in the Signal Integrity and Analog Mixed Signal & Wireless product lines is anticipated to contribute significantly. Furthermore, the increasing adoption of artificial intelligence may provide additional support for the quarter’s results.

Moreover, heightened demand for Tri-Edge and FiberEdge transimpedance amplifier products in hyperscale data centers is expected to bolster Semtech’s performance in the forthcoming quarter.

Additionally, the growing interest in LoRa devices and LoRaWAN standards is projected to enhance top-line growth this quarter. The company’s one-channel LoRaWAN hub reference design and evaluation kit for small-scale network deployments, targeted at SMBs/SMEs and smart homes, are likely to positively affect the results.

However, macroeconomic challenges, such as persistent inflation and high interest rates, could pose obstacles for Semtech. A potential delay in the adoption of CopperEdge products, stemming from architectural changes in server racks, might dampen first-quarter results.

Further concerns arise from escalating tensions between the United States and China. A downturn in the industrial sector and the Connectivity segment is a likely negative factor impacting the company.

Q1 Earnings Outlook According to Zacks Model

According to the Zacks model, the likelihood of surpassing earnings estimates increases with a positive earnings ESP combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold). Unfortunately, Semtech does not fit this profile.

Currently, Semtech holds an earnings ESP of 0.00% and a Zacks Rank of #3. Investors can explore additional stock options using our earnings ESP Filter for better investment opportunities.

Stocks with Positive Earnings Outlook

Some stocks worth considering that combine favorable elements for potential earnings beats include:

Dell Technologies (DELL) has an earnings ESP of +5.02% and a Zacks Rank of 3. DELL stock has decreased by 27.2% over the past year and is scheduled to report its first-quarter 2025 results on May 29.

NVIDIA (NVDA) shows an earnings ESP of +3.87% and carries a Zacks Rank of 3. NVIDIA shares have risen by 42% in the past year and are set to report first-quarter 2025 results on May 28.

Salesforce (CRM) presents an earnings ESP of +0.57% and a Zacks Rank of 2. CRM shares have increased by 1.3% over the past year and will report first-quarter 2025 results on May 28.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.