Lattice Semiconductor (LSCC) Edges Higher on Another Beat-and-Raise, Steady Progress Against High Expectations Says Analyst
Shares of Lattice Semiconductor (NASDAQ: LSCC) are up about 1% in pre-open Wednesday after the company’s Q2 results topped market’s expectations.
LSCC reported adjusted earnings of $35.2 million or $0.25 per share on sales of $125.9 million for Q2 to beat the analyst estimates of $0.22 per share.
“We drove 25% year-over-year revenue growth, with a 49% expansion in non-GAAP net income year-over-year. Strong revenue growth was driven by double-digit growth in each of our market segments based on the strength of our market leading portfolio. We are excited to be in a new growth phase, with multiple growth vectors across our end markets."
The company said it projects to generate sales of $128 million (the midpoint of the guidance).
Cowen analyst Matthew Ramsay raised the price target by $7.00 to $65.00 per share on the Outperform-rated stock.
“Another beat/raise with all segments up Q/Q as ample on-hand internal inventory enables impressive execution. Ongoing Nexus progress/initial positive feedback for the Avant platform are encouraging. With GMs 62%+, and incremental OpEx to support growth, Lattice is in an enviable position as the only independent FPGA company with low power expertise and an expanding roadmap,” Ramsay wrote in a client note.
“Overall, we continue to believe Lattice's differentiated use of low-power FD-SOI technology, focused SW stack, and its competitive positioning as the only FPGA provider focused on low-power embedded processing should allow it to benefit from powerful secular content drivers in Datacenter, Auto, Industrial, and AI Inference. With the Nexus platform still early, and potentially Avant in 2-3 years, we believe these trends should provide a tailwind to growth beginning in 2021 and allow double-digit growth through the 3-4 year target model driving long-term opportunities across multiple end markets.”
Rosenblatt analyst Hans Mosesmann says the company’s decision to add inventories continues to yield benefits. The analyst also hiked the price target to $68.00 per share from $62.00 per share.
“Management [is] not seeing major disruptions, however, inventories in the channel continue to decline. Design activity is unusually strong but not surprising given the four newer Nexus platforms and four S/W stacks that accelerate the adoption of Lattice small FPGAs. Avant, the upcoming mid-tier FPGA family continues to garner keen industry interest in a segment that lacks innovation. Interestingly, management indicated on the call that design activity is also being accelerated on microcontroller designs that are being changed to use small FPGAs due to extending lead times,” Mosesmann stressed in a memo sent to clients.