Why Lattice Semiconductor (LSCC) stock is rising today

What happened:

Shares of semiconductor designer Lattice Semiconductor ( NASDAQ:LSCC ) rose 12.7% in the morning session after the company announced the appointment of Dr. Ford Tamer as chief executive. Tamer replaced Esam Elashmawi, who had served as interim CEO since June 2024. Elashmawi will continue in his role as Chief Strategy and Marketing Officer.

Tamer adds extensive experience and expertise in semiconductors, networking and enterprise software. He served as President and CEO of Inphi for over nine years; prior to that, he held leadership roles at Telegent Systems and Broadcom’s Infrastructure Networking Group. Further cementing his pedigree, Tamer holds advanced degrees from MIT.

Finally, the company reaffirmed its guidance on July 29, 2024, suggesting there will be no major surprises when it reports earnings for the quarter. This further confirms that the company has been able to effectively manage the leadership transition.

Overall, the market appears to support the move given Tamer’s solid resume and his appointment, which not only addresses the leadership gap, but also brings a sense of stability and direction.

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What the market tells us:

Shares of Lattice Semiconductor are quite volatile and have had 22 moves of more than 5% in the past year. But such big moves are very rare even for Lattice Semiconductor, and this tells us that this news had a significant impact on the market’s perception of the business.

The biggest move I wrote about in the past year was about 2 months ago, when the stock fell 18.1% on news that the company reported Q2 earnings results. Its revenue and EPS both missed Wall Street estimates.

Looking ahead, next quarter revenue guidance also missed analysts’ expectations. The company announced the headwinds to the industry, adding: “2024 Q2 results reflect the impact of industry cyclical headwinds. While the industry continues to go through a period of inventory normalization, we are starting to see signs of improvement. We continue to execute on our basis. continued expansion of the product portfolio and remains well positioned for long-term growth.”

Overall, this was a mediocre quarter for Lattice Semiconductor. Following the results, Bank of America analysts downgraded the stock from Neutral to Underperform, citing “slowed growth prospects and reduced visibility.”

Lattice Semiconductor is down 27.2% year-to-date and at $49.82 a share trades 42.6% below its 52-week high of $86.84 dated September 2023. Investors who bought the stock Lattice Semiconductor worth $1,000 5 years ago would now be looking at an investment worth $2,414.

The story continues

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