Lattice Semiconductor (LSCC) shares have looked slightly mortal of late, with the shares up another 10% since my last update (and almost flat a week ago) but lagging the SOX by more than 10%. Nothing has really changed with the business, if anything the bullish arguments are a little stronger, but a very high valuation is a threat, particularly if the tech sector swoons again or the semiconductor sector starts to correct on worries of eventual normalization of lead times.
I still love the company and the opportunities here – the company’s dedication to the low-power FPGA space is leading to demonstrably superior products that deliver real value for users, and as edge applications grow, I expect even more share gains to come, as well as more margin leverage. I’d also note a scarcity value premium here. Not only is Lattice the only meaningful public FPGA pure-play left, it’s also a quality growth name in the mid-cap chip space, and after a multiyear wave of M&A, there aren’t so many of those left anymore.
This remains a “love the company, can’t get comfortable with the stock” situation. Valuation already looks unhinged from the fundamentals to me, so I could just as easily argue for a price 20% higher or 20% lower than today’s price.
Click the link to continue:
Lattice Semiconductor - Growth, Margin Leverage, And Scarcity Value
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