Semtech Corporation (SMTC)

Days of inventory on hand (DOH) is a key ratio that measures how efficiently Semtech Corporation manages its inventory. Looking at the data, we can see fluctuations in Semtech's DOH over the past few years:

1. As of January 29, 2023, Semtech had 126.12 days of inventory on hand. This indicates that the company may have been carrying excess inventory relative to its sales levels, which could tie up working capital and increase holding costs.

2. By January 31, 2023, the DOH increased significantly to 272.73 days. This sharp increase suggests potential issues with inventory management, such as overproduction or slowing sales, leading to a buildup of inventory that may need to be addressed.

3. However, by January 28, 2024, Semtech managed to reduce its DOH to 31.02 days. This significant decrease implies that the company became more efficient in managing its inventory, possibly by improving production planning or implementing better inventory control practices.

4. Subsequently, the DOH increased to 92.44 days by January 31, 2024, indicating a slight increase in inventory holding periods compared to the previous year. It would be essential for Semtech to monitor this trend to ensure optimal inventory levels.

5. As of January 31, 2025, the DOH stood at 131.89 days, showing a further increase in inventory holding periods. This could suggest potential challenges in aligning production with demand or fluctuations in customer orders that may impact inventory management.

In summary, fluctuations in Semtech Corporation's Days of Inventory on Hand indicate varying levels of inventory management efficiency over the years. Monitoring this ratio and implementing strategies to optimize inventory levels are crucial for maintaining a healthy balance between inventory investment and operational performance.

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Jan 31, 2025