Lattice Semiconductor: Strong Fundamentals, a High Short Interest Ratio, and a Buy Signal
Stocks with high short interest or high short interest ratios have been all over the news this week, thanks to the insane rallies from Gamestop (GME) and AMC Networks (AMCX). The crazy jumps in those two stocks have caused additional interest in almost all stocks with high short interest ratios. A number of stocks have rallied more than 20% simply because they have higher short interest than many stocks.
We have been using the short interest ratio as a contrarian indicator for over 20 years and know the power of a short squeeze. The difference between Gamestop and AMC Networks, and the stocks that we like are the fundamentals. Both of those companies have terrible fundamentals and rallying for one reason and only one reason.
For us, if you can find a stock with strong fundamentals that is in upward trend and has a high short interest ratio, now you have a high probability trade. That is exactly what you have in Lattice Semiconductor (LSCC).
Before we get to Lattice’s short interest info and the fundamentals, let’s look at what the short interest ratio is and why it matters. First, the short interest ratio is simply the number of shares sold short divided by the average daily trading volume. For instance, if there are 5 million shares sold short and the average daily trading volume if 1 million, the short interest ratio is 5.0.
The reason the ratio can be a useful trading tool is because it can cause rallies to accelerate greatly. Let’s look at an example. If a stock is trading at $50 and there are short sellers that have bet on the stock going down to $40 or $37.50 for a quick 20% to 25% gain, to close their short positions the short sellers have to buy the stock. If the stock goes up instead of going down, the short sellers may have a stop set at $55 or $60. If a stock is already rallying and now you have short sellers adding additional buying pressure, the rally can accelerate greatly.
With that being said, the Nasdaq website shows 5,283,152 shares of Lattice sold short as of December 31. The average daily trading volume is 589,498 and that gives us a short interest ratio of 8.96. If the stock rallies and the short sellers are forced to cover, it will take almost nine days of average trading volume for them to cover their positions.
High Confidence Level Bullish Signal Generated on Lattice Semiconductor
In addition to those factors, the Tickeron Trend Prediction tool just generated a bullish signal for Lattice Semiconductor on January 26. The trend prediction tool is an AI-based mechanism that looks at a number of different fundamental and technical indicators and looks at trade setups to what we are seeing currently. It then calculates whether the stock is likely to go up or down and with a level of certainty assigned.
The buy signal shows a confidence level of 90% and by using the previous 100 instances with similar stats, the probability of the stock moving higher over the next month is at 90%.
Part of the positive outlook for Lattice comes from the company scoring very well in one fundamental indicator and scoring above average in another one. The Tickeron Profit vs. Risk Rating for Lattice is 4 with the best score being a 1, and the worst score being a 100. This suggests that being long the stock presents low risk with the possibility of high returns. The average Profit vs. Risk Rating for the semiconductor industry is 47, placing the stock well above average.
Lattice also scores well in the Tickeron SMR rating. The reading for the company is 38, again the best score is 1 and the worst is 100. The SMR rating measures sales growth, income margin, and return on equity. A low score indicates strong sales and a profitable business model. Looking in to the components that make up the SMR rating, Lattice does extremely well with the ROE at 27.8% and the income margin at 20.6%.
Trending Higher with a Short-Term Pullback
Looking at the weekly chart for Lattice Semiconductor we see a trend line connecting the lows from March and September. That trend line is sitting just above $35 currently and it could provide support as the stock has fallen over the last four weeks.
The stock was tremendously overbought when it peaked in early January, at least based on the 14-week RSI. The indicator has since fallen and is at its lowest level since last April when the stock was just starting to recover from its first-quarter pullback. The indicator hasn’t been in oversold territory at any point in the last three years.
Earnings on the Horizon
Lattice is set to report fourth quarter earnings results on February 16. The current consensus estimate is for EPS of $0.17 and that matches the results the company saw in the fourth quarter of 2019. The company has beaten EPS estimates in each of the last seven quarters, so there is a history of the company issuing better than expected results.
Revenue is expected to come in at $103.02 million and that is up 2.8% from the same period last year. Revenue is predicted to grow by 8.1% in 2021 and earnings are expected to grow by 13.4%.
This is where the high short interest ratio can come in to play. Should the company beat expectations again, and should it beat on the revenue estimates as well, we could see the stock rally and the high short interest ratio could cause the rally to accelerate. A boost to the outlook could also cause the stock to reverse from its recent pullback.
The combination of solid fundamentals, a high short interest ratio, and a bullish signal suggests that Lattice should move higher in the coming months.
Aroon Indicator for LSCC shows an upward move is likely
LSCC's Aroon Indicator triggered a bullish signal on May 22, 2025. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 236 similar instances where the Aroon Indicator showed a similar pattern. In of the 236 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 27, 2025. You may want to consider a long position or call options on LSCC as a result. In of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for LSCC just turned positive on June 09, 2025. Looking at past instances where LSCC's MACD turned positive, the stock continued to rise in of 50 cases over the following month. The odds of a continued upward trend are .
LSCC moved above its 50-day moving average on June 06, 2025 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for LSCC crossed bullishly above the 50-day moving average on June 11, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LSCC advanced for three days, in of 317 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 70 cases where LSCC's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LSCC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
LSCC broke above its upper Bollinger Band on June 10, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. LSCC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock slightly better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.515) is normal, around the industry mean (9.277). P/E Ratio (132.405) is within average values for comparable stocks, (63.173). LSCC's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (2.334). LSCC has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.019). P/S Ratio (13.850) is also within normal values, averaging (33.954).
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General Information
a developer of high-speed programmable logic devices
Industry Semiconductors
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