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Semtech's Lora Technology in Use in Alibaba's New Tracker

Semtech Corporation SMTC recently announced that Alibaba’s BABA public cloud services provider, Alibaba Cloud, has unveiled an IoT-enabled location tracker based on Semtech’s LoRa devices and LoRaWAN protocol.

This new tracker named Beagle provides accurate GPS-free location tracking up to 2,000 meters. The tracker can be used in a number of applications namely personnel and asset management, small device loss, theft prevention, as well as enhanced pet and child monitoring.

The LoRa Technology enables long-range connectivity of Internet of Things (IoT) devices and aids in connecting sensors to the cloud. Its long-range performance and low power consumption requirement enhance overall performance. Moreover, this technology helps in real-time communication of data and analytics to enhance efficiency, as well as productivity.

Consequently, the move is likely to boost the adoption rate of the company’s LoRa technology, which in turn will drive the top line.

 

Semtech Corporation Price and Consensus

 

Semtech Corporation Price and Consensus

Semtech Corporation price-consensus-chart | Semtech Corporation Quote

Partnerships Play a Key Role

Semtech is witnessing growing strategic alliance and contracts, thanks to cost-efficient abilities of LoRa technology in creating as well as deploying IoT solutions.

In addition to the current deal, the company recently joined forces with Continental Automated Buildings Association (“CABA”) to enhance and innovate the latter’s portfolio of smart home and building technologies.

Additionally, per a deal between Ineo-Sense and Lauak Group, the former will provide LoRa-enabled asset tracking sensors that will be integrated into the latter’s manufacturing containers.

Further, the technology has been selected to be used in Brazil’s network, which is based on the LoRaWAN protocol that is deployed by American Tower (“ATC”). Moreover, Lemonbeat adopted the LoRa technology to enhance smart metering solutions.

We believe Semtech is well poised to rapidly penetrate into the expanding IoT market, aided by the highly popular LoRa technology.

IoT Market's Growth Prospects

Internet of Things (IoT) devices have been gaining significant traction in recent times. These devices have been successful in making an impact across all end markets served by the company.

Per IOT Analytics, the number of active IoT devices is expected to grow from 7 billion in 2018 to 10 billion and 22 billion by 2020 and 2025, respectively, including devices on the consumer and enterprise side.

Presently, LoRaWAN networks are operating in more than 50 countries. It expects the LoRaWAN open protocol to reach more countries in the near term. Industry experts expect four out of every 10 long-range IoT connections to be powered by LPWAN, with LoRaWAN being the dominant player.

Semtech is well poised to cater to growing demand in this domain on the back of robust product portfolio and strong IoT capabilities.

Zacks Rank & Stocks to Consider

Currently, Semtech carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Itron, Inc. ITRI and MACOM Technology Solutions Holdings, Inc. MTSI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Itron and MACOM Technology is currently projected at 25% and 15%, respectively.

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