What Happened:
Shares of semiconductor designer Lattice Semiconductor (NASDAQ:LSCC) jumped 12.7% in the morning session after the company announced the appointment of Dr. Ford Tamer as Chief Executive Officer. 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 was President and CEO of Inphi for over nine years; before that, he held leadership roles at Telegent Systems and Broadcom's Infrastructure Networking Group. Further solidifying his pedigree, Tamer holds advanced degrees from MIT.
Lastly, the company reaffirmed its guidance on July 29, 2024, suggesting that there won't be major surprises when it reports earnings for the quarter. This further confirms that the company was able to manage the transition in leadership efficiently.
Overall, the market seems to be supportive of the move, given Tamer's solid bio and his appointment, which not only addresses the leadership gap but also brings a sense of stability and direction.
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What is the market telling us:
Lattice Semiconductor’s shares are quite volatile and over the last year have had 22 moves greater than 5%. But moves this big are very rare even for Lattice Semiconductor and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was about 2 months ago, when the stock dropped 18.1% on the news that the company reported second-quarter earnings results. Its revenue and EPS both missed Wall Street's estimates.
Looking ahead, guidance for next quarter's revenue also missed analysts' expectations. The company called out industry headwinds, adding, "Second quarter 2024 results reflect the impact of cyclic industry 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 ongoing product portfolio expansion and remain well positioned for long-term growth."
Overall, this was a mediocre quarter for Lattice Semiconductor. Following the results, Bank of America analyst downgraded the stock's rating from Neutral to Underperform, citing "slowing growth prospects and muted visibility."
Lattice Semiconductor is down 27.2% since the beginning of the year, and at $49.82 per share it is trading 42.6% below its 52-week high of $86.84 from September 2023. Investors who bought $1,000 worth of Lattice Semiconductor’s shares 5 years ago would now be looking at an investment worth $2,414.
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