Benchmark maintains Buy rating on Silicon Labs with $160 target

On Wednesday, Benchmark analyst Cody Acree confirmed a Buy rating for Silicon Labs (NASDAQ:SLAB), with a steady price target of $160. During Silicon Labs’ first analyst day in three years, the company provided an updated March quarter revenue forecast, narrowing it to $175-$180 million. This update refines the previous projection of $170-$185 million while affirming the earlier midpoint estimate of $177.5 million, aligning with the current consensus among Wall Street analysts. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s near-term prospects.

Silicon Labs also reiterated the other aspects of its financial guidance for the first quarter. The company expects its non-GAAP gross margin to remain between 54% and 56%, which aligns with their trailing twelve-month gross margin of 53.4%. In addition, non-GAAP operating expenses are anticipated to be within the range of $103-$105 million. Furthermore, Silicon Labs projects its non-GAAP earnings per share (EPS) for the quarter to be between a positive $0.01 and a loss of $0.19, with a midpoint estimate of a $0.09 loss, which is consistent with the current Street consensus. InvestingPro analysis reveals that while the company isn’t currently profitable, analysts expect it to return to profitability this year.

The updated guidance provided by Silicon Labs reflects a fine-tuning of their revenue expectations rather than a significant shift in their financial outlook. By maintaining the midpoint and other elements of their previous guidance, the company indicates a steady performance in line with analyst expectations. InvestingPro data shows that Silicon Labs maintains a strong balance sheet with more cash than debt and a healthy current ratio of 6.15, indicating robust liquidity.

Silicon Labs’ analyst day offered an opportunity for the company to engage with analysts and investors, detailing their current financial position and future prospects. The confirmation of the Buy rating and price target by Benchmark underscores a positive view of the company’s potential in the market.

Investors and market watchers typically look to such analyst events for insights into a company’s strategic direction and operational focus. Silicon Labs’ reaffirmation of its first-quarter guidance provides a clear financial trajectory for the near term, as the company continues to navigate the market.

In other recent news, Silicon Labs has confirmed its financial guidance for the first quarter of 2025, projecting revenue between $175 million and $180 million. The company expects a GAAP gross margin of 54% to 56% and operating expenses ranging from $128 million to $130 million. Non-GAAP figures, which exclude certain items, predict slightly lower operating expenses of $103 million to $105 million, with non-GAAP diluted earnings per share estimated between $0.01 and $(0.19). KeyBanc Capital Markets reiterated its Overweight rating for Silicon Labs, maintaining a price target of $160, reflecting confidence in the company’s potential for sustained earnings growth. Benchmark also upgraded the stock from Hold to Buy, setting a new price target of $160, citing a favorable industry up-cycle through fiscal year 2026. Additionally, Needham raised its price target from $140 to $150, maintaining a Buy rating, following fourth-quarter results and first-quarter guidance that slightly exceeded consensus estimates. Needham noted strong momentum in Continuous Glucose Monitors and Electronic Shelf Labels, with the CGM business potentially contributing 10% of total revenue in the next 12-18 months. Silicon Labs is also focusing on smart metering opportunities in India and Japan, with improving inventory levels and lean distribution channels.

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