Needham has maintained a Purchase ranking on Lattice (OTC:) Semiconductor (NASDAQ: LSCC) however lowered the worth goal to $61 from the earlier $80 within the wake of Lattice failing to fulfill expectations from second-quarter outcomes.
To make certain Lattice’s earnings per share of $0.23, falling in need of the anticipated $0.24 consensus.
Needham attributed the shortfall primarily to ongoing stock changes, significantly within the Industrial and Automotive segments.
The analyst from Needham famous that the present weak point in Lattice Semiconductor’s efficiency will not be because of shedding market share however is a results of the corporate coming into the downturn later than its opponents. It was additionally instructed that the stock overhang is perhaps extra important than initially anticipated. Regardless of these challenges, there have been optimistic indicators, akin to enhancements in bookings and backlog on a quarter-over-quarter foundation.
Expectations for the second half of 2024 have been tempered, with income projections now set to be decrease than these of the primary half of the yr. This revision has led to a lower within the earnings estimates for the corporate. The analyst expressed a perception that this adjustment would possibly result in buyers assigning a decrease valuation a number of to Lattice Semiconductor shares.
Needham’s report concluded with a revised valuation a number of of 35 occasions the calendar yr 2026 next-generation earnings per share (NG EPS).
The corporate’s gross sales additionally decreased by 35% yr over yr and 12% sequentially. The downturn was particularly notable within the industrial and automotive sectors, which noticed a 50% lower, and the communications and computing segments, which skilled a 15% drop.
InvestingPro Insights
Current InvestingPro information and evaluation present further context to the scenario at Lattice Semiconductor (NASDAQ:LSCC). The corporate is presently buying and selling at a excessive earnings a number of, with a P/E ratio of 40.64, and even after changes for the final twelve months as of Q1 2024, it stands at a nonetheless elevated 34.2. That is consistent with the issues raised by Needham concerning the potential for buyers to assign a decrease valuation a number of to Lattice shares. Moreover, the corporate’s income has proven a slight decline of 0.07% over the past twelve months as of Q1 2024, with a extra pronounced quarterly income drop of 23.6% in Q1 2024, which can underscore the challenges forward.
On a extra optimistic word, InvestingPro Suggestions point out that Lattice Semiconductor’s money flows can sufficiently cowl curiosity funds and that its liquid property exceed short-term obligations, suggesting a level of monetary stability. Nevertheless, analysts have revised their earnings downwards for the upcoming interval and anticipate a gross sales decline within the present yr, aligning with the warning expressed by Needham.
For buyers searching for a extra complete evaluation, there are an extra 17 InvestingPro Suggestions accessible, which may present deeper insights into Lattice Semiconductor’s monetary well being and market place. To discover the following tips, go to https://www.investing.com/professional/LSCC and think about using the coupon code PRONEWS24 to stand up to 10% off a yearly Professional and a yearly or biyearly Professional+ subscription.
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