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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Semtech Corporation (XNAS:SMTC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SMTC
Name:
SEMTECH CORPORATION (XNAS:SMTC)
Sector:
26.83M
Industry:
Semiconductors
CEO:
Mr. Mohan Maheswaran
Total Employees:
1,439
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -133.20% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SEMTECH CORPORATION(SMTC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
34.36
One Month Price Target:
$34.67
Six Month Price Target :
$36.23
Likely Price in One Year's Time:
Ticker:
$38.1
Likely Trading Range Today Under (Normal Volatility)
$34.17
Price Upper limit ($) :
$34.56
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$32.04
This week:
$29.17
This month :
$23.99
Other Primary facts
Market Cap:
2.15B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
63.52M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.82%
-27.15%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$45.13
$40.23
$23.59
$28.49
Medium risk (<10%) entry points
Buy Call
Sell Call
$38.63
Buy Put:
Sell Put:
$37.58
$30.08
$31.14
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SMTC
Sharpe Ratio:
-0.01%
Comparison:
SMTC, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -100.22% lower than the industry
& is -100.30% lower than the market/S&P 500 average
Average Returns/Yield of
SMTC
Daily returns:
0.01%
Weekly returns:
0.04%
Monthly returns:
0.17%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -93.52% below industry average
Classification:
SMTC, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
SMTC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.29%
Weekly Volatility:
7.36%
Monthly Volatility:
14.71%
Yearly Volatility:
50.97%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
20.69%
Volatility in last five trading days has been 528.80% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.75%
Weekly VaR:
-15.09%
Monthly VaR:
-30.18%
How Much Can the price of
SMTC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$25.22
This translates to price declining to:
$5.15
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
SMTC is a 113.02% riskier investment compared to the market/S&P 500 & is 82.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.29% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SMTC
Beta in relation to market/S&P 500--1.62
Expected beta in 1 year's time:
0.87
Expected beta in 3 year's time:
1.23
Unlevered (debt free) Beta:
1.332
Beta in relation to Nasdaq (XNAS):
0.894
Beta in relation to all global stocks::
1.099
Beta Comparison & Analysis
Beta of competitors/peers::
1.313
Beta is 23.52% higher than peers
Average Industry Beta:
1.41
Beta is 14.97% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
15.06%
Sustainable growth rate is -45.55% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.122
Alpha is -163.69% below industry average alpha yield
Alpha is -776% below the market average
Analysis of Cost of Capital of
SMTC
Equity cost of capital:
0.143
Equity cost of capital is 11.29% above industry mean WACC
Unlevered (without debt) cost of capital:
11.72%
Before-tax cost of debt:
2.90%
After-tax cost of debt:
2.29%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.29%
WACC is 18.11% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.16
Revenue growth rate per share of (3Y):
3.1
Annual revenue growth rate is -91.48% below industry average
EPS:
$2.16
Expected Annual growth rate of EPS (3Y):
25.99%
Expected future EPS growth rate is -50.15% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$3.17
-
-
Debt per share
$2.76
EBITDA per share
$3.17
Valuation Analysis Today of
SMTC
P/E Ratio:
13.99
P/E Ratio of Competitors/Peers:
51.43
P/E ratio is -72.80% lower than main peers & is -66.28% lower than the industry
Stock price/value with industry average P/E ratio: $89.59
SMTC is -61.65% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.82
Price to sales ratio is -65.25% below the industry mean
P/B (Price to book value ratio):
3.1
Price to free cash flow: 10.83
-
Net income growth rate (3Y):
75.06%
Net income growth rate is -231.03% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
24.89%
Net debt to equity ratio:
-11.77%
Debt to assets ratio:
16.39%
Net debt to assets ratio:
-7.75%
Debt-to-asset ratio is -57.95% below industry average
Ability to repay debt:
Interest coverage ratio:
39.56
Interest coverage ratio is 20.66% more than industry average
Looking forward:
Debt growth rate:
-7.50%
Annual debt growth is -108% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.23%
Analysis of Key Statistics
Correlation of price movement with the market:
0.501
Statistical significance of correlation:
SMTC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is -20.08% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
-0.048
Covariance of price movement with the market:
-0.091
Kurtosis
12.93
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.865
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SMTC
Gross Profit Margin Ratio:
254%
Operating Profit Margin Ratio:
21.24%
Operating profit margin is -9.73% lower than the industry
Net Profit Margin Ratio:
254%
Effective Tax Rate:
12.86%
Effective tax rate is -14.80% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
19.91%
Return on equity (ROE) is -30.38% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.11%
Return on assets (ROA) is -0.42% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
4.78
Current ratio is 17.71% above industry average
Cash Conversion Cycle (days):
10.3
Cash conversion cycle is -81.36% below industry average
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
8.44%
In-depth Efficiency Analysis
Revenue generated per employee:
536.9K
Each employee generates -13% less revenue than industry average revenue per employee
EBITDA generated per employee:
139.9K
Each employee generates -40% less EBITDA than industry average revenue per employee
Profit generated per employee:
97.4K
Each employee generates -40% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
18.6K
Each employee generates -33% less free cash flow than industry average revenue per employee
Assets/Capital per employee
422.7K
Each employee generates -33% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 9.46%
Growth rate in R&D investment/expenditure is -33.16% lower than the industry
Competitors/Peer firms of
SMTC
POWER INTEGRATIONS, INC. (XNAS:POWI)
CRICUT, INC. (XNAS:CRCT)
VICOR CORPORATION (XNAS:VICR)
MIMECAST LIMITED (XNAS:MIME)
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. (XNAS:MTSI)
CIRRUS LOGIC, INC. (XNAS:CRUS)
CDK GLOBAL, INC. (XNAS:CDK)
TENABLE HOLDINGS, INC. (XNAS:TENB)
ALTAIR ENGINEERING INC. (XNAS:ALTR)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
5/1/22
Revenue:
772.64M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
281.16M
491.47M
149.92M
-
172.77M
-
3.64M
326.34M
-
5.09M
35.64M
201.32M
164.10M
140.21M
158.54M
20.39M
140.21M
Statement of Cash Flow
Date:
Period:
8.48M
Differed Income Tax :
- 29.00K
Stock Based Compensation :
11.84M
Change in Working Capital :
- 14029.00K
Accounts Receivables:
3.92M
Other Working Capital:
364.85M
Other Non-Cash Items:
2.83M
Net Cash Provided by Operating Activities:
32.59M
Investments in PP&E:
- 5760.00K
Net Acquisitions:
-
Purchases of Investments:
- 2927.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
258.22M
-
258.22M
66.52M
93.92M
42.71M
461.36M
131.26M
351.14M
10.45M
-
25.41M
90.00M
608.26M
-
1.07B
51.20M
-
-
-
45.32M
96.51M
175.32M
92.35M
268.62M
-
365.13M
785.00K
694.70M
- 7728.0K
16.52M
April 30, 2021 at 6:00:00 AM
536.65M
704.28M
1.07B
-
175.32M
- 82903.0K
-
32.00K
- 8655.00K
- 4000.00K
-
- 25000.00K
-
- 5602.00K
- 34602.00K
-
- 10672.00K
258.22M
268.89M
32.59M
- 5760.00K
26.83M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
SMTC
2023
2024
2025
2026
2027
$38.29
$75.77
$84.02
$93.18
$103.33