Semtech Corporation (SMTC)
Profitability ratios
Return on sales
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Jan 26, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 38.36% | 62.71% | 62.66% | 60.38% | 62.54% |
| Operating profit margin | -122.28% | 12.16% | 19.71% | 12.72% | 9.66% |
| Pretax margin | -134.87% | 10.32% | 19.19% | 10.75% | 8.30% |
| Net profit margin | -141.41% | 8.04% | 17.08% | 10.16% | 5.92% |
Semtech Corporation's profitability ratios exhibit significant fluctuations over the past five years. The gross profit margin has shown a declining trend, decreasing from 62.54% in 2020 to 38.36% in 2024. This indicates a decrease in the company's ability to generate profits from its core business activities.
The operating profit margin also displays volatility, with a sharp decline to -122.28% in 2024 from 12.72% in 2021. This suggests that the company's operating expenses have outpaced its operating income, resulting in significant losses at the operational level in the latest year.
Similarly, the pretax margin and net profit margin ratios have witnessed fluctuations. The pretax margin dropped to -134.87% in 2024, indicating that the company's losses before tax were greater than its revenue. The net profit margin also decreased to -141.41% in 2024, reflecting the company's inability to generate profits after accounting for all expenses and taxes.
Overall, the profitability ratios of Semtech Corporation reveal a concerning trend of declining profitability and financial performance over the past five years, signaling challenges in effectively managing costs and generating sustainable earnings.
Return on investment
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Jan 26, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -68.74% | 3.61% | 12.82% | 6.93% | 4.94% |
| Return on assets (ROA) | -79.49% | 2.39% | 11.11% | 5.54% | 3.03% |
| Return on total capital | -88.91% | 4.69% | 16.09% | 7.82% | 5.97% |
| Return on equity (ROE) | — | 8.12% | 17.04% | 8.57% | 4.71% |
Based on the provided profitability ratios for Semtech Corporation over the past five years, we can observe the following trends:
1. Operating return on assets (Operating ROA):
- Operating ROA has been fluctuating significantly, ranging from a negative 68.74% in 2024 to a high of 12.82% in 2022. The negative Operating ROA in 2024 indicates that the company's operating income generated from its assets was insufficient to cover its operating expenses.
2. Return on assets (ROA):
- ROA has also shown variability, with a low of -79.49% in 2024 and a high of 11.11% in 2022. This ratio reflects the company's overall profitability in generating earnings from its total assets, with negative values indicating losses.
3. Return on total capital:
- The return on total capital has similarly fluctuated, with a low of -88.91% in 2024 and a high of 16.09% in 2022. This ratio measures the efficiency of the company in generating returns from both equity and debt capital employed.
4. Return on equity (ROE):
- ROE has exhibited growth over the years, with values ranging from 4.71% in 2020 to a peak of 17.04% in 2022. This ratio highlights the return earned by the company's common shareholders and shows the company's ability to generate profits from the shareholders' equity.
In summary, Semtech Corporation's profitability ratios have displayed fluctuations over the past five years, with varying levels of performance in generating returns from assets, capital, and equity. It is essential for investors and stakeholders to closely monitor these ratios to assess the company's financial health and performance.