Lattice Semiconductor Q3 Earnings: Is NasdaqGS:LSCC Expensive at 99.8x Price/EPS?

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Lattice Semiconductor Corporation (NasdaqGS:LSCC) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.16/share on revenue of $101 million. The consensus earnings per share (EPS) of $0.16/share is based on a poll of 9 analysts and represents a decline in eps of −7.8% over the same quarter last year, when the company reported earnings of $0.17/share.

The revenue forecast of $101 million based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −2.4%. Last year the company reported $103.5 million in revenue for the quarter.

Expected to report EPS contraction of −7.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $100.98 $103.47 −2.4%
EPS $0.16 $0.17 −7.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarter.

What are your expectations from Lattice Semiconductor Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.15 $0.17 11.7% Beat
Q1, 2020 $0.14 $0.15 5.5% Beat
Q4, 2019 $0.15 $0.17 14.3% Beat
Q3, 2019 $0.15 $0.17 14.4% Beat
Q2, 2019 $0.11 $0.15 32.9% Beat
Q1, 2019 $0.09 $0.11 24.2% Beat
Q4, 2018 $0.08 $0.08 0.0% Met
Q3, 2018 $0.10 $0.11 12.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by falling −4.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $31.64 $30.20 −4.6% Decline
April 28, 2020 $19.53 $22.31 14.2% Increase
February 11, 2020 $19 $21.20 11.6% Increase
October 29, 2019 $19.18 $19.70 2.7% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.09, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.09 implies a 1.9% chance of earnings manipulation.

Fundamentals And Technical Analysis

Lattice Semiconductor Corporation is currently trading at $34.15/share, up 2.1% for the day. The company is trading at approximately 97.1% of its 52-week high of $35.16/share. The company’s stock price is up 13.1% since the last earnings report and up 2.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 69.56 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:LSCC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 99.75 and a forward P/E multiple of 51.33.

Lattice Semiconductor Corporation’s current share price also implies a price-to-book (P/B) multiple of 12.69. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $34.15
P/E Ratio 99.8x
P/E Ratio (Fwd) 51.3x
PEG Ratio 0.5
Total Debt / Total Capital 4.1%
Levered Free Cash Flow $80.545 million
EV / EBITDA 54.2x

Finbox

Lattice Semiconductor Corporation is a mid-cap stock with a market capitalization of $4.621 billion and a total enterprise value of $4.651 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

Lattice Semiconductor Corporation, together with its subsidiaries, develops and sells semiconductor technologies in Asia, Europe, and the Americas. The company offers field programmable gate arrays that consist of five product family lines, including the ECP, MachXO, iCE40, and CrossLink, as well as power and thermal management products; and development kits and boards. It also provides video connectivity application specific standard products, such as port processors, port controllers, video processors, transmitters, receivers, bridges, and converters for use in mobile devices, set-top-boxes, UHD TVs, home theater systems, PCs, projectors, and monitors; and various software tools, such as Lattice Diamond design software, radiant software, iCEcube2 design software, ispLEVER classic software, neural network compiler, LatticeMico system development tools, PAC-designer, programmer and deployment tools, and ORCAstra, a PC-based graphical user interface. In addition, the company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. It sells its products directly to end customers, and indirectly through a network of independent manufacturers’ representatives and independent distributors. The company primarily serves original equipment manufacturers in the communications and computing, consumer, and industrial and automotive end markets. Lattice Semiconductor Corporation was founded in 1983 and is headquartered in Hillsboro, Oregon.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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