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Since the artificial intelligence (AI) rush began in 2023, large-cap and mid-cap companies have received a lot of attention. Most tech giants have been doing well lately, including Microsoft (MSFT), Amazon (AMZN), and Nvidia (NVDA). -Better-than-expected quarterly results; their stock prices soared this year.
but Russell 2000 Index (RUT)tracks the performance of a large basket of small-cap stocks, so it shouldn’t be overlooked. Two small-cap stocks that investors are interested in right now are semiconductor company Semtech (SMTC) and energy company Matador Resources (MTDR), both of which Wall Street sees as having significant upside potential this year. .
As the age of AI advances, investing in innovative technology companies is a wise decision. On the other hand, energy stocks Diversify your portfolio as global energy demand continues to rise. Let’s take a closer look at why Semtech and Matador Resources are attractive investments right now.
Semtech Co., Ltd. Stock
Founded in 1960, Semtech is focused on developing high-performance analog and mixed-signal semiconductors. Can be used for various purposes.
Semtech may not directly compete with the big players in the semiconductor industry. However, with advancements in AI, Semtech has the opportunity to scale its operations on a larger scale.
inside 3rd quarter Semtech’s net sales for fiscal year 2024 were $209 million, an increase of 13.1% from the prior year. However, adjusted earnings per share (EPS) was $0.02, down from $0.65 in the same period last year. Both sales and profits exceeded analysts’ expectations. In fact, analysts expected the company to report a loss in the quarter, but it reported a profit.
One of Semtech’s key products is LoRa (Long Range), a low power wide area technology. Significant advances have been made in the Internet of Things (IoT) field, providing long-range, low-power connectivity to smart devices.Management listed in Third quarter financial results announcement We have found that many European-based power companies are interested in adopting LoRa-based solutions.
Additionally, its broad product portfolio serves a wide range of markets, including data center, automotive, and medical.
Recently, the company announced a new product, the AirLink XR60 5G router solution.5G and Wi-Fi 6 performance Ultra-compact and ultra-robust design for the most demanding environments. ”
Looking ahead, Management expects Macroeconomic conditions are expected to reduce net sales to approximately $190 million (plus or minus $10 million) in the fourth quarter. Additionally, EPS is expected to range from a loss of $0.05 to a gain of $0.06. In comparison, analysts expect fourth-quarter sales of $190.7 million, or a loss of $0.04 per share. Analysts expect Semtech to continue posting profits through fiscal 2024.
What is Wall Street saying about Semtech stocks?
Overall, Wall Street rates SemTech stock a Strong Buy. Of the 12 analysts covering SMTC, 10 rate it as a “strong buy,” one recommends a “moderate buy,” and one recommends a “hold.”
Semtech stock is down 6.2% year-to-date. Analyst average price target At $31.40, it suggests that Wall Street sees a potential upside of about 54.6% over the next 12 months. Wall Street has set a high price target of $42 for SMTC, meaning the price could rise 106% from current levels.
matador resource stock
Founded in 2003, Matador Resources has become a leading player in oil (CLJ24) and natural gas (NGH24) exploration. The company currently operates seven drilling rigs in the United States.
Matador stock is 236.6% Returns Over the past five years. The remarkable increase in revenue from his $899.5 million in 2018 to his $3.06 billion in 2022 reflects the stock price performance. During the same period, profits grew at a compound annual growth rate of 23.9%.
On a year-to-date basis, Matador stock is 5.8% increasecompared to a 7.3% gain for the S&P 500 ($SPX).
recently 3rd quarterMatador produced more than 135,000 barrels of oil and gas equivalent (BOE) per day, claiming its highest quarter in total production.
Matador, like most energy companies, pays a quarterly dividend. The yield is 1.33%, compared to the energy sector average of 4.24%. Although the yield isn’t particularly attractive, the company’s dividend payments have been consistent. recent increase $0.15 to $0.60 per share. This is the fourth dividend increase for Matador since it began paying dividends in 2021.
Additionally, the expected dividend payout ratio is 9.5%, indicating that there is ample room for dividend growth.
At the end of the quarter, the company had adjusted free cash flow of $144.6 million. Apart from paying dividends, the company uses free cash flow to pay down debt and invest in acquisitions.Management said: Positive FCF The company’sPlanting position Over 150,000 net acres in the Delaware Basin. ” The company also plans to add an eighth rig in the first quarter of 2024.
Matador expects to finish the year on a strong note with increased production and debt repayments. Approximately 145,000 BOE per day is expected in the fourth quarter. Analysts expect fourth-quarter sales to rise 13% to $799 million. Sales and profits in 2024 are expected to increase by 20.8% and he 1.5% respectively.
What is Wall Street saying about Matador stock?
Turning to Wall Street, Matador stock isstrong buyOf the 10 analysts covering the stock, 7 rate it as a “strong buy,” 2 recommend a “moderate buy,” and 1 recommends a “hold.”
Analysts’ average price target is $70.09, implying a potential upside of 15.4% over the next 12 months. A high estimate of MTDR suggests that the stock price could rise up to 35% from current levels.
On the date of publication, Sushree Mohanty did not have any positions (directly or indirectly) in any securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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