Lattice Semiconductor’s Market Reset Is Over: The Rebound Begins

Key Points

• Lattice Semiconductor's mixed Q4 performance can be overlooked because business is turning a corner and gaining momentum.
• New design wins and a growing backlog suggest revenue will grow sequentially throughout 2025 and revert to YOY mid-year.
• The company is well-positioned as the leader in field-programable gate arrays, suitable for applications in all sectors and industries. 

It has taken three years for the boom-and-bust cycle brought on by COVID-19, stimulus spending, and supply chain issues to run its course, but it has, and the market reset for Lattice Semiconductor NASDAQ: LSCC is over. Down more than 50% from its peak at the end of 2024, its stock price is in rebound mode in early 2025 and gaining momentum.

The Q4 results weren’t spectacular, but they revealed a bottom for the business, a return to growth was indicated, and momentum was building in new products to sustain growth through the year’s end. 

This company is the leading provider of FPGAs for numerous industries, including consumer, automotive, and computing, so it is also well-positioned to sustain long-term growth. FPGAs are programmable semiconductors suitable for multiple applications, including data center operations, enabling parallel computing and AI. The 2024 design wins and improving business momentum are tied to the company’s software stack, including computer vision, automation, and autonomous driving platforms. 

Lattice Semiconductor’s Business Reverts to Growth in 2025

Lattice Semiconductor had a mixed quarter in Q4, with revenue contracting by 31.2% but outperforming the consensus estimate reported by MarketBeat. All segments were weak, but legacy businesses underperformed, leading to the contraction, partially offset by a double-digit increase in New Products. Regionally, Asia and the United States were stronger, offset by European weakness. 

Margin raised a red flag, but the cause offsets it. The company’s gross and operating margins contracted, leaving earnings below the consensus target due to the accelerated purchases of supplies. The supplies are no longer needed and likely liquidated, allowing the company to recoup the expense. That said, Q4 results were sufficient to sustain the balance sheet health and capital return outlook for share repurchases. The company repurchases its shares regularly, incrementally reducing the count by 0.5% in Q4 and F2024. 

The guidance is sound, compounded by positive commentary from the CEO and CFO. The company guided Q1 revenue and earnings to ranges with midpoints above the consensus forecasts, expecting a sequential improvement in business. The guidance expects revenue to contract by only 15% compared to the 31.2% contraction in Q4, setting the company up to return to growth as soon as Q2.

Lattice Semiconductors Is Well Supported by the Market in 2025

Lattice Semiconductor's stock price is well supported in 2025 due to its operational quality and fortress balance sheet. Highlights at the end of 2024 include increased cash and total assets and reduced liability. The critical details are that it has no long-term debt and is net cash relative to its total liability. 

Analysts and institutions indicate support by raising their price targets in the first case and buying the stock on balance in the second. The two groups show a high conviction in this stock’s future performance, with 11 of 12 analysts rating it at Buy and institutions owning nearly 100% of it. Regarding the stock price targets, the consensus is $65 in mid-February, but revisions lead to the high-end range near $80, and higher highs may be indicated before mid-year. 

Lattice Semiconductor Confirms Support at Moving Averages

Lattice Semiconductor’s stock price surged more than 10% following the Q4 release and shows strong support at a cluster of moving averages. The cluster includes the 30- and 150-day EMAs and a longer-term 30-month EMA, which reveals support from multiple market groups, including long—and mid-term investors and short-term traders. With this in play, the market is unlikely to move lower but may struggle to hit new highs until later in the year.