Semtech Corporation
Semtech Corporation Fundamental Analysis
Semtech Corporation (SMTC) shows weak financial fundamentals with a PE ratio of 267.25, profit margin of 2.78%, and ROE of 5.12%. The company generates $1.1B in annual revenue with strong year-over-year growth of 14.83%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.0/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SMTC's fundamental strength across five key dimensions:
Efficiency Score
WeakSMTC struggles to generate sufficient returns from assets.
Valuation Score
WeakSMTC trades at a premium to fair value.
Growth Score
ModerateSMTC shows steady but slowing expansion.
Financial Health Score
ExcellentSMTC maintains a strong and stable balance sheet.
Profitability Score
WeakSMTC struggles to sustain strong margins.
Key Financial Metrics
Is SMTC Expensive or Cheap?
P/E Ratio
SMTC trades at 267.25 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SMTC's PEG of 11.07 indicates potential overvaluation.
Price to Book
The market values Semtech Corporation at 13.47 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 68.22 times EBITDA. This signals the market has high growth expectations.
How Well Does SMTC Make Money?
Net Profit Margin
For every $100 in sales, Semtech Corporation keeps $2.78 as profit after all expenses.
Operating Margin
Core operations generate 7.02 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.12 in profit for every $100 of shareholder equity.
ROA
Semtech Corporation generates $2.03 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Semtech Corporation produces operating cash flow of $161.66M, showing steady but balanced cash generation.
Free Cash Flow
Semtech Corporation generates strong free cash flow of $150.71M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.63 in free cash annually.
FCF Yield
SMTC converts 1.78% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
267.25
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
11.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
13.47
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.84
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.95
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.43
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How SMTC Stacks Against Its Sector Peers
| Metric | SMTC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 267.25 | 35.19 | Worse (Expensive) |
| ROE | 5.12% | 1155.00% | Weak |
| Net Margin | 2.78% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.95 | 0.41 | Weak (High Leverage) |
| Current Ratio | 2.43 | 4.71 | Strong Liquidity |
| ROA | 2.03% | -314918.00% (disorted) | Weak |
SMTC outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Semtech Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
42.53%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-1882.02%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-152.65%
Industry Style: Growth, Innovation, High Beta
Declining