Is Semtech Corp. overvalued or undervalued?

Sep 20 2025 05:33 PM IST
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As of August 25, 2025, Semtech Corp. is considered overvalued with a high P/E ratio of 84 and other elevated valuation metrics, despite a strong one-year return of 38.88%, suggesting it may not be a good investment at its current price.
As of 25 August 2025, the valuation grade for Semtech Corp. has moved from risky to expensive, indicating a shift towards overvaluation. The company appears overvalued based on its high P/E ratio of 84, a Price to Book Value of 6.64, and an EV to EBITDA of 28.83. In comparison, peers such as Tower Semiconductor Ltd. have a P/E of 37.63 and an EV to EBITDA of 13.38, highlighting the significant premium Semtech is trading at relative to its industry.

Despite a strong one-year return of 38.88% compared to the S&P 500's 17.14%, the overall valuation metrics suggest that Semtech Corp. is not justified at its current price level. The PEG ratio of 0.70 indicates potential growth, but the elevated valuation ratios signal that the stock may be priced for perfection, making it a less attractive investment at this time.
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