Semtech to Report Q1 Earnings: What's in the Cards for the Stock?

Semtech Corporation SMTC is scheduled to report first-quarter fiscal 2026 results after market close on May 27.

For first-quarter fiscal 2026, Semtech expects net sales of $250 million (+/- $5 million), indicating 21% year-over-year growth. The Zacks Consensus Estimate for revenues is pegged at $249.79 million, indicating a rise of 21.20% from the year-ago quarter.

SMTC anticipates non-GAAP earnings per share to be 37 cents (+/- 3 cents). The consensus mark for the same is pegged at 38 cents, unchanged over the past 60 days, indicating a robust year-over-year improvement of 533%.

Factors to Consider for SMTC

Semtech’s fiscal first-quarter performance is likely to have benefited from strength across its infrastructure and high-end-consumer end markets. Similarly, the wireless end-market is likely to have witnessed strong growth owing to SMTC’s increasing 5G offerings. Continued growth in FiberEdge and Tri-Edge products, particularly for 400G/800G modules, is likely to boost the top line in the to-be-reported quarter.

Semtech Corporation Price and EPS Surprise

Semtech Corporation price-eps-surprise | Semtech Corporation Quote

Strong Momentum across its Signal Integrity and Analog Mixed Signal & Wireless product lines is expected to have contributed well. The growing adoption of artificial intelligence might have been a plus for the upcoming quarter.

Growing traction across hyperscale data center applications on the back of Tri-Edge and FiberEdge transimpedance amplifier products is expected to have aided SMTC’s performance in the to-be-reported quarter.

The increasing demand for LoRa devices and LoRaWAN standards is expected to have contributed positively to top-line growth in the to-be-reported quarter. The availability of its one-channel LoRaWAN hub reference design and evaluation kit targeting smaller-scale network deployments, such as for SMB/SME and smart home applications, is anticipated to impact its fourth-quarter results positively.

However, Macroeconomic challenges, including the protracted inflationary conditions and still-high interest rates, are likely to have posed challenges for the company in the fiscal fourth quarter. Delayed adoption of CopperEdge products due to architectural changes in server racks is likely to affect SMTC’s first-quarter fiscal 2026 results.

Additionally, escalating tensions between the United States and China might have raised concerns. Softness in the industrial end-market and the Connectivity segment is expected to have been a major negative.

What Our Proven Model Says for SMTC’s Q1 Earnings

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Semtech has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Dell Technologies DELL has an Earnings ESP of +5.02% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DELL shares have plunged 27.2% in the past year. DELL is set to report its first-quarter 2025 results on May 29.

NVIDIA NVDA has an Earnings ESP of +3.87% and a Zacks Rank #3 at present.

NVIDIA shares have appreciated 42% in the past year. NVIDIA is slated to report its first-quarter 2025 results on May 28.

Salesforce CRM has an Earnings ESP of +0.57% and carries a Zacks Rank #2 at present.

CRM shares have appreciated 1.3% in the past year. CRM is set to report its first-quarter 2025 results on May 28.

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This article originally published on Zacks Investment Research (zacks.com).

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