Is Semtech a buy right now?

Roth Capital Markets analyst Scott Searle raised his price target on Semtech (Semtech Stock Quote, Chart, News, Analysts, Financials NASDAQ:SMTC) to $77.00 from $65.00 while maintaining a Buy rating on Nov. 25, citing solid third-quarter results and continued strength in the company’s Data Center and LoRa businesses.

Semtech, founded in 1960 and based in Camarillo, Calif., supplies analog and mixed-signal semiconductors to consumer, enterprise, communications and industrial markets.

Searle said third-quarter fiscal 2026 revenue of $267-million rose 12.8% year over year, slightly above the midpoint of guidance and in line with consensus. Semiconductor sales were $178.7-million, up 16% year over year, led by Data Center at $56.2-million (+30%) and LoRa at $40-million (+40%). IoT Systems and Connectivity was flat sequentially at $88.3-million, reflecting product transitions and headwinds from the U.S. government shutdown. Gross margin was 53%, with stronger semiconductor margins (61.3%) offset by softer IoT margins (36.6%).

Adjusted EBITDA and EPS of $62.7-million and $0.48 were modestly ahead of his estimates.

Fourth-quarter revenue guidance of $268-million to $278-million came in above the Street, though Searle noted that “lower IoT gross margins tied to module headwinds” are expected to weigh on profitability, with adjusted EPS guided to $0.40–$0.46.

Searle highlighted several core themes. Data Center revenue reached a record level and now represents roughly one-third of semiconductor sales, supported by pre-LPO activity. He said linear pluggable optics are “poised to ramp this quarter” across multiple customers, while active copper cables are expected to begin contributing through a hyperscale deployment in mid-2026. He also pointed to expanding ACC engagement driven by energy-efficiency advantages.

LoRa posted its strongest quarter since fiscal 2023, with design activity “robust” across new dual-mode LoRa/WiSun solutions and broader use cases. Searle expects LoRa to grow at a rate “above the 15%–20% long-term target.”

On portfolio moves, he said Semtech is giving higher priority to divesting non-core Sierra Wireless assets, including cellular modules, gateways and IoT platforms, which he believes could fetch roughly $500-million. A divestiture would streamline operations and shift the financial model toward the company’s higher-margin semiconductor segment.

With Data Center and LoRa together comprising more than half of semiconductor sales and growing 30% and 40% year over year, Searle said Semtech “is entering a sustained period of double-digit growth.”

He raised his fiscal 2027 forecasts, initiated fiscal 2028 estimates, and increased his target to $77, or roughly 8x EV/CY27E semiconductor sales, noting the multiple remains below that of many data-center-focused peers.

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