Assessing Semtech (SMTC) Valuation After A 131% One Year Total Shareholder Return
Semtech stock snapshot after recent performance
Semtech (SMTC) has attracted fresh attention after a strong run over the past year, with total return above 130%, including a 13% move in the past month and roughly 40% over the past 3 months.
See our latest analysis for Semtech.
Semtech’s recent 30 day share price return of 13.02% and 90 day share price return of 40.10%, alongside a 1 year total shareholder return of 131.35%, reflect momentum from investors reassessing its growth profile and risk.
If Semtech’s move has you looking beyond a single name, this could be a moment to see what else is setting up in 34 AI infrastructure stocks.
With Semtech now trading around US$87.66 and sitting above its average analyst price target, the key question is whether recent growth in revenue and net income is underappreciated or if the market is already pricing in future gains.
Most Popular Narrative: 5.1% Overvalued
Semtech’s last close at $87.66 sits modestly above the most followed fair value estimate of $83.43, which is based on a detailed long term earnings and cash flow view built using a 10.65% discount rate.
Accelerating demand from hyperscale data centers and AI infrastructure is driving robust, multi-year growth across Semtech's high-margin data center business, supported by design wins in advanced optical (FiberEdge), low-power (LPO), and active copper interconnects (CopperEdge/ACC); as data rates move from 400G to 800G and 1.6T, Semtech stands to capture significant revenue and margin expansion from new content per deployment.
Want to see the full playbook behind that fair value? The narrative ties together revenue growth, margin expansion and a rich future earnings multiple. The exact mix of growth, profitability and valuation expectations might surprise you.
Result: Fair Value of $83.43 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, those assumptions could be knocked off course if mix driven margin pressure persists, or if integration issues around past deals keep weighing on earnings quality.
Find out about the key risks to this Semtech narrative.
Next Steps
With both risks and rewards in play, it makes sense to look at the underlying data yourself and decide quickly where you stand. You can get a balanced snapshot of the current concerns and potential upsides through 2 key rewards and 3 important warning signs.
Looking for more investment ideas?
If you are weighing what to do after Semtech’s run, it is worth lining up a few other ideas now so you are not reacting later.
- Spot potential mispricings early by scanning 56 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect their qualities.
- Strengthen your income stream by reviewing 13 dividend fortresses, focused on companies offering yields from sources that may be more resilient.
- Protect your downside by checking 80 resilient stocks with low risk scores, a set of companies that currently show lower risk scores in our model.
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.
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