Gross Margin % is calculated as gross profit divided by its revenue. Semtech's Gross Profit for the
three
months ended in Jan. 2024 was $-0.4 Mil. Semtech's Revenue for the
three
months ended in Jan. 2024 was $192.9 Mil. Therefore, Semtech's Gross Margin % for the quarter that ended in Jan. 2024 was -0.20%.
Warning Sign:
Semtech Corp gross margin has been in long-term decline. The average rate of decline per year is -7.5%.
The historical rank and industry rank for Semtech's Gross Margin % or its related term are showing as below:
SMTC'
s Gross Margin % Range Over the Past 10 Years
Min: 34.1 Med: 59.84 Max: 63.26
Current: 34.1
During the past 13 years, the highestGross Margin % of Semtech was 63.26%. The lowest was 34.10%. And the median was 59.84%.
SMTC's Gross Margin % is ranked better than 59.57% of 972
companies
in the Semiconductors industry
Industry Median: 28.06
vs SMTC: 34.10
Semtech had a gross margin of -0.20% for the quarter that ended in Jan. 2024 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Semtech was -7.50% per year.
Semtech Gross Margin % Historical Data
The historical data trend for Semtech's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Semtech's Gross Margin %
For the Semiconductors subindustry, Semtech's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Semtech's Gross Margin % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Semtech's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Semtech's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Semtech (NAS:SMTC) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Semtech had a gross margin of -0.20% for the quarter that ended in Jan. 2024 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Semtech Gross Margin % Related Terms
Thank you for viewing the detailed overview of Semtech's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Semtech Corp is engaged in designing, developing, manufacturing and marketing analog and mixed-signal semiconductors, algorithms and wireless semiconductors, connectivity modules, gateways, routers and connected services for IoT. The company operates in four reportable segments' 1) Signal Integrity, 2) Advanced Protection and Sensing, 3) IoT System and 4) IoT Connected Services. The majority of the company's revenue is earned through Advanced Protection and Sensing Products segment. Geographically majority of the company's revenue is earned from Asia Pacific region.
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