MeritValue

SEMTECH CORP

SMTCdata completeness 100%18 fiscal years on file
The thesis, from the filings

SEMTECH CORP earns about -12% on invested capital, below its ~9% cost of capital, but has diluted owners by 35% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $4.14 and $4.75 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$740.9M1$756.5M2$868.8M3$909.3M3$1.05B3
Net income$125.7M4$61.4M5−$1.09B6−$161.9M6−$40.4M6
Operating cash flow$203.1M7$126.7M8−$93.9M9$58M9$181.2M9
Capital expenditure$26.2M10$28.3M11$29.2M12$7.86M12$9.78M12
Free cash flow (derived)$176.9M7$98.4M8−$123.1M9$50.1M9$171.4M9
Total debt$171.7M13$1.34B14$1.37B15$551.5M16$491.2M16
Cash & equivalents$279.6M17$235.5M18$128.6M19$151.7M20$195.2M20
Diluted shares65.6M64.0M64.1M71.6M88.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$62.2
your share of equity
Profit it earned you last year
−$4.57
Free cash flow it threw off
$19.39
Debt you’d be carrying
$55.59

10 shares is a claim on $62.2 of net worth that earned you −$4.57 and generated $19.39 of cash last year, against $55.59 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-12% avg · 5y
FY22 20%FY23 4%FY24 -80%FY25 -8%FY26 2%

It earned about -12% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+35% shares · 5y

Share count is up 35% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 186% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $4.14 and $4.75 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$4.14
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$50.1M
DCF · Growth Exit 5Y
$4.75
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$50.1M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $4.75
The three cases
Bear0.0%$4.75
Base0.0%$4.75
Bull5.0%$6.72

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-01-30 · accession 0000088941-24-000030 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-01-29 · accession 0000088941-25-000068 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2024-01-28 · accession 0000088941-26-000005 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-01-30 · accession 0000088941-24-000030 (NetIncomeLoss)
  5. 10-K · period ending 2023-01-29 · accession 0000088941-25-000068 (NetIncomeLoss)
  6. 10-K · period ending 2024-01-28 · accession 0000088941-26-000005 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-30 · accession 0000088941-24-000030 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-01-29 · accession 0000088941-25-000068 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-01-28 · accession 0000088941-26-000005 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-30 · accession 0000088941-24-000030 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-01-29 · accession 0000088941-25-000068 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-01-28 · accession 0000088941-26-000005 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-30 · accession 0000088941-23-000006 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-01-29 · accession 0000088941-24-000030 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-01-28 · accession 0000088941-25-000068 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2025-01-26 · accession 0000088941-26-000005 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2022-01-30 · accession 0000088941-23-000006 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-01-29 · accession 0000088941-24-000030 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-01-28 · accession 0000088941-25-000068 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2025-01-26 · accession 0000088941-26-000005 (CashAndCashEquivalentsAtCarryingValue)