Lattice Semiconductor Corp: Market-Trouncing 5G Stock Just Getting Started

Bullish Lattice Semiconductor Stock Up by 100% Year-Over-Year

Lattice Semiconductor Corp (NASDAQ:LSCC) isn’t a household name, nor does it get discussed much around the water cooler, but it should. LSCC stock has been quietly trouncing the broader market and its peers.

As of this writing, Lattice Semiconductor stock is up by:

  • 24% over the last six months
  • 100% year-over-year
  • 24% year-to-date
  • 318% since bottoming in March 2020
  • 725% since the start of 2019

Despite the fact that LSCC stock has been trading near record levels, it still has lots of room to run. And not just because euphoric investors are pumping stock valuations into nosebleed territory.

Lattice Semiconductor Corp continues to report strong financial results, launch new products, and add new blue-chip customers. Moreover, it was recently added to the S&P MidCap 400 index.

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On top of that, thanks to the company’s history of solid cash flow, Lattice Semiconductor maintains a healthy share repurchase program.

Chart courtesy of StockCharts.com

LSCC Stock Overview

Lattice Semiconductor is the leading provider of programmable, smart connectivity technology, including low-power semiconductor products.

The company helps its more-than-8,000 global customers implement their own designs, lower their development costs, and improve their overall time to market. (Source: “Lattice Semiconductor Corporate Overview,” Lattice Semiconductor Corp, June 24, 2021.)

Lattice Semiconductor’s field-programmable gate array (FPGA) products use up to 75% less power, have up to 2X faster video connectivity speeds, and have 100X lower soft error rates.

With the smallest sizes, lowest power usage, highest security, and ease of use, the company’s FPGA products can be found in virtually every end market, including the following:

  • Automotive (infotainment and advanced driver assistance)
  • Computing (servers and client)
  • Communications (5G wireless and switches/routers)
  • Consumer (smartphones, wearables, smart homes, augmented reality/virtual reality, etc.)
  • Industrial (Internet of Things and factory automation)

What’s the big deal with FPGA?

The integrated circuits can be programmed after being manufactured, which allows businesses to customize integrated circuits for their own purposes.

Lattice Semiconductor Corp’s growing customer base includes Amazon.com, Inc. (NASDAQ:AMZN), Ford Motor Company (NYSE:F), Lockheed Martin Corporation (NYSE:LMT), Microsoft Corporation (NASDAQ:MSFT), and Sony Corporation (NYSE:SNE).

Another Quarter of Strong Results

For the first quarter ended April 3, Lattice Semiconductor announced that its revenue increased by 19% year-over-year and eight percent sequentially to $115.7 million. (Source: “Lattice Semiconductor Reports First Quarter 2021 Results,” Lattice Semiconductor Corporation, May 4, 2021.)

The company’s gross margin expanded to 61.0% from 59.1% in the same period last year and from 60.5% in the fourth quarter of 2020. 

Its first-quarter net income improved by 130% year-over-year and 19% sequentially to $18.8 million, or $0.13 per share. During the first quarter of 2021, the company generated $29.0 million in cash flow from operations, up from $21.0 million in the first quarter of 2020.

Lattice Semiconductor Corp also repurchased $15.0 million of its own shares during the quarter.

For the second quarter of 2021, Lattice Semiconductor expects to report revenue between $116.0 and $124.0 million on a non-generally accepted accounting principles (non-GAAP) basis, as well as gross margin of 62% (plus or minus one percent) on a non-GAAP basis.

Analyst Take

Lattice Semiconductor stock is one of the best 5G stocks around. In 2020, a year that saw the global economy slip into a recession, the company reported excellent financial results, and its share price advanced 135%.

That momentum has continued in 2021, with Lattice Semiconductor Corp reporting great results and providing solid guidance as it enters a new growth phase.