Forensic Analysis · Technology / Software · as of Jun 27, 2026

SEMTECH CORP (SMTC)

A forensic read on SEMTECH CORP built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

C · Mixed — selective

Forensic grade

Grey Zone

Financial health

1.6

Altman Z-score

Clean

Earnings quality

Forensic signals

-5.9%

ROE

$13.9B

Market cap

SEMTECH CORP earns a C (Mixed — selective) forensic quality grade, and its Altman Z-score is 1.6, placing it in the Grey zone. 6 forensic signals were flagged in its latest SEC filings, led by return on invested capital.

What the filings flag

3%Return on invested capital. Return on invested capital is 3% and steady — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.

+12.7%/yrShare-count dilution. Diluted share count changed +38% over the last 3 years to FY2026 (+12.7%/yr). The count is GROWING — existing holders are being diluted. That's ~12.7% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~38%.

5% of revStock-based comp load. Stock-based compensation ran 5% of revenue and 34% of free cash flow in FY2026 — about $0.65 per diluted share. Heavy — a large slice of 'free cash flow' is really being paid out in stock, so the true owner cash per share is well below the headline.

stoppedShareholder returns — halted. Capital returns have STOPPED — $50M of buybacks + dividends in FY2023, but ~$0 in FY2025. A halt usually means the company is conserving cash; understand why before reading it as neutral.

141dInventory days. Days inventory outstanding moved from 132 to 141 FY2025→FY2026 (against cost of goods sold; inventory +20% vs +12% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.

$848MGoodwill impairments. Took $848M of goodwill writedowns across 3 year(s) (FY2024 ($756M), FY2025 ($7M), FY2026 ($85M)). Writedowns mean past acquisitions underperformed what was paid for them — worth weighing on capital-allocation skill.

Key fundamentals

Net Margin-3.8%

Debt / Equity0.89x

Free Cash Flow$171.4M

Latest Revenue$1.05B

Return on Equity-7.3%

Revenue Growth YoY+15.5%

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Data from SEC EDGAR public filings · metrics as of Jun 27, 2026. Forensic signals flag probability, not certainty.