Semtech Corp. recently announced the appointment of Mark Lin as their new Chief Financial Officer, succeeding Emeka Chukwu. Lin, who has extensive experience in the industry, will officially assume his role no later than October 4th. Previously serving as the Corporate Controller of MKS Instruments Inc., Lin brings a wealth of knowledge gained during his 14-year tenure at Microsemi Corp.
In a separate development, TD Cowen analyst Matthew Ramsay made an unexpected announcement discontinuing coverage of Semtech’s stock. Ramsay emphasized that his previous investment rating, price target, and earnings estimates are no longer valid and should not be considered reliable. Responding to queries via email, Ramsay clarified that this decision had “zero to do with the new CFO and was not at all a reflection on the CFO announcement (the who, the timing, or otherwise).”
Following these developments, Semtech’s shares experienced fluctuation during after-hours trading. The stock initially rose by 2%, only to settle at a 0.1% increase after hours. However, during regular trading hours on Friday, the stock saw a decline of 1.8% before closing at $24.21.
Semtech Corp. is currently preparing for its delayed earnings report scheduled for Wednesday, which has generated anticipation within the industry. With these recent changes in leadership and the notable departure of an influential analyst’s coverage, Semtech’s future trajectory remains uncertain. Investors and market enthusiasts eagerly await the upcoming earnings report to assess its implications for the company.
Decision Made Regarding Research Resources
Semtech recently announced a decision to discontinue coverage with TD Cowen research management. According to the analyst, this decision was made in consideration of the limited research resources available and the ongoing developments within the semiconductor industry.
The timing of this announcement, made prior to the CFO announcement, is customary for such discontinuations, typically occurring at 6 p.m. Eastern time at the end of the week. This timing played a role in the decision.
With this change, Semtech now has 12 analysts providing coverage for its stock, as reported by FactSet data. Among these analysts, there are nine buy ratings and three hold ratings.
Notably, Semtech recently notified the Securities and Exchange Commission of a delay in filing its quarterly report. This prompted Ramsay, the analyst, to review his model as he observed a challenging restructuring and turnaround process that still has a long way to go.
As a result of these developments, Semtech rescheduled its earnings report and conference call with analysts to September 13, after the close of markets.
One prominent factor contributing to Semtech’s financial situation is the expected goodwill impairment of approximately $340 million. This impairment is a rapid recognition of the impact stemming from Semtech’s $1.2 billion cash acquisition of Sierra Wireless. Ramsay had previously cautioned about a potential correction within the acquired business in a June note.