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Semtech (SMTC) Is Up 7.3% After Q4 Sales Guidance And Buyback Completion Has The Bull Case Changed?

Simply Wall St · 1d ago
  • In the third quarter of fiscal 2026, Semtech reported net sales of US$267.0 million, reduced its net loss to US$2.9 million, and completed a long-running US$675.19 million share repurchase program that retired 19,043,495 shares since 2008.
  • The company also issued fourth-quarter guidance calling for net sales of US$273 million, plus or minus US$5 million, signaling continued momentum in its data center and LoRa portfolios despite lingering margin pressure.
  • We’ll now examine how Semtech’s fourth-quarter sales guidance and data center strength affect the existing investment narrative around growth and margins.

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Semtech Investment Narrative Recap

To own Semtech, you need to believe its data center and LoRa businesses can outgrow and eventually outweigh current margin pressure, turning recent revenue gains into consistent profitability. The latest quarter’s modest net loss improvement and slightly higher fourth quarter sales guidance support that thesis at the margin, but do not fundamentally change the biggest near term swing factor, which is how product mix between higher margin data center and lower margin IoT evolves.

The completion of the long running US$675.19 million buyback, which retired over 19 million shares since 2008, matters mainly for how investors think about per share metrics rather than near term operations. In the current context, the more consequential update is fourth quarter fiscal 2026 sales guidance of about US$273 million, plus or minus US$5 million, because it ties directly into the key catalyst around data center demand and its ability to support better margins over time.

Yet even with that momentum, investors should be aware that accelerating growth in lower margin IoT systems could still...

Read the full narrative on Semtech (it's free!)

Semtech's narrative projects $1.3 billion revenue and $253.1 million earnings by 2028.

Uncover how Semtech's forecasts yield a $80.21 fair value, in line with its current price.

Exploring Other Perspectives

SMTC Community Fair Values as at Dec 2025
SMTC Community Fair Values as at Dec 2025

Five fair value estimates from the Simply Wall St Community span a wide US$25.69 to US$80.21, underlining how far apart individual views can be. As you weigh those opinions, keep in mind that Semtech’s growth is increasingly being driven by segments that may dilute margins, which has important implications for how sustainable any earnings recovery might be.

Explore 5 other fair value estimates on Semtech - why the stock might be worth less than half the current price!

Build Your Own Semtech Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.