Head-To-Head Analysis: Semtech (SMTC) and Cree (CREE)

Semtech (NASDAQ: SMTC) and Cree (NASDAQ:CREE) are both mid-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Insider & Institutional Ownership

97.7% of Semtech shares are held by institutional investors. Comparatively, 98.9% of Cree shares are held by institutional investors. 2.2% of Semtech shares are held by insiders. Comparatively, 1.1% of Cree shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Semtech and Cree’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Semtech $544.27 million 4.26 $54.66 million $0.68 51.32
Cree $1.47 billion 2.88 -$98.11 million ($1.14) -37.27

Semtech has higher earnings, but lower revenue than Cree. Cree is trading at a lower price-to-earnings ratio than Semtech, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Semtech has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Cree has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.


This table compares Semtech and Cree’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semtech 7.79% 12.13% 7.38%
Cree -7.77% -1.24% -1.04%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Semtech and Cree, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semtech 0 2 7 0 2.78
Cree 3 11 2 0 1.94

Semtech presently has a consensus target price of $41.89, suggesting a potential upside of 20.03%. Cree has a consensus target price of $33.17, suggesting a potential downside of 21.93%. Given Semtech’s stronger consensus rating and higher probable upside, equities analysts clearly believe Semtech is more favorable than Cree.


Semtech beats Cree on 12 of the 14 factors compared between the two stocks.

Semtech Company Profile

Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.

Cree Company Profile

Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.

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