Semtech Corporation SMTC is scheduled to report fourth-quarter fiscal 2025 results on March 13.

For the fiscal fourth quarter, Semtech anticipates revenues to be $250 million (+/- $5 million). The Zacks Consensus Estimate for revenues is pegged at $247.91 million, indicating a rise of 28.48% from the year-ago quarter.

SMTC anticipates non-GAAP earnings per share to be 32 cents (+/- 3 cents). The consensus mark for the same is pegged at 32 cents, unchanged over the past seven days, indicating a robust improvement from the year-ago quarter’s loss of 6 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Factors to Consider for SMTC

Semtech’s fiscal fourth-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. SMTC’s launch of cost-optimized 5G solutions, including EM9492 and EM9295 modules, are likely to be adopted by telecom carriers. Increased compliance with certifications, including FCC, PTCRB for its EM8695 5G RedCap module and ISED, CE, JRF, and NCC certifications for its HL7900 Global 5G LPWA module, is likely to boost its adoption among global networking carriers.

Strong Momentum across its Signal Integrity and Analog Mixed Signal & Wireless product lines are 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. Robust demand for the company’s CopperEdge linear redrivers for Active Copper Cable applications is likely to have driven Semtech’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. Additionally, escalating tensions between the United States and China might have raised concerns. Softness in the industrial end-market and Connectivity segment is expected to have been a major negative.

What Our Proven Model Says for SMTC’s Q4 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 -8.42% 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 to Consider

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

FuelCell Energy FCEL has an Earnings ESP of +5.42% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

FCEL’s shares have declined 80.2% in the past year. It is slated to report its first-quarter 2025 results on March 11.

The Zacks Consensus Estimate for FCEL’s first-quarter 2025 earnings is pegged at a loss of $1.52 per share, which narrowed by 18 cents in the past 30 days.

Ciena Corporation CIEN has an Earnings ESP of +15.02% and carries a Zacks Rank #3 at present.

CIEN shares have gained 33.7% in the past year. It is set to report first-quarter fiscal 2025 results on March 11.

The Zacks Consensus Estimate for CIEN’s first-quarter fiscal 2025 earnings is pegged at 39 cents per share, down by 2 cents over the past 30 days, indicating an decline of 41% from the year-ago quarter’s reported figure.

GDS Holdings GDS has an Earnings ESP of +1.49% and carries a Zacks Rank #3 at present.

GDS shares have surged 364.9% year to date. It is set to report fourth-quarter 2024 results on March 19.

The Zacks Consensus Estimate for GDS’ fourth-quarter 2024 earnings is pegged at a loss of 22 cents per share, broadened by 3 cents in the past 30 days.

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Ciena Corporation (CIEN) : Free Stock Analysis Report

Semtech Corporation (SMTC) : Free Stock Analysis Report

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GDS Holdings (GDS) : Free Stock Analysis Report

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