Between Weakening Crypto And A Questionable Deal, Semtech Is On Its Heels

The last few months have not been easy ones for Semtech (NASDAQ:SMTC). A collapse in the value of Helium HNT cryptocurrency (down 95% over the past year) threatens one of the recent sources of momentum in the key LoRa business, while the acquisition of Sierra Wireless (SWIR) looks questionable at best. If that weren't enough, handset volumes are weak, and it looks like PON, data center, and 5G deployments are slowing.

Should the Sierra Wireless deal go forward, I think it will ultimately destroy value for shareholders. That's offset by good long-term trends and opportunities in home broadband and data center, not to mention the longer-term potential of LoRa in the IoT space. The valuation does look too low now, but it's hard for me to recommend a stock where I disagree with management's strategic priorities, and that's the case for me now with Semtech.

 

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Between Weakening Crypto And A Questionable Deal, Semtech Is On Its Heels