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On Wednesday, KeyBanc Capital Markets reiterated their Overweight rating on Silicon Labs (NASDAQ:SLAB), currently trading at $127.37, with a steady price target of $160.00. Despite the stock’s recent 9.6% decline over the past week, this affirmation follows the company’s 2025 Analyst Day, which KeyBanc analysts attended, gaining increased confidence in Silicon Labs’ potential for sustained earnings growth over an extended period. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period.
Silicon Labs management confirmed their first-quarter revenue guidance, with a midpoint of $177.5 million and a narrowed revenue range of $5 million. They also endorsed consensus revenue growth expectations of 36% for 2025, which aligns with InvestingPro forecasts showing 35% revenue growth for the year. The company has updated its long-term financial model, maintaining a goal of 20% revenue growth while improving its gross margin target to 55-57% from the previous mid-50s percentage and its operating margin to over 20% from the prior 20%. The company maintains strong financial health with a current ratio of 6.15, indicating ample liquidity to meet short-term obligations.
The analysts highlighted Silicon Labs’ view of the total available market (SAM), which is estimated to reach $4.4 billion in 2024. The company anticipates a compound annual growth rate (CAGR) of 13% through 2028 across its markets, with specific growth projections including 12% for Home, 11% for Life, 19% for Industrial, and 14% for Commercial sectors.
Furthermore, Silicon Labs sees an opportunity funnel exceeding $17 billion in 2025, with design wins already capturing $10 billion. These wins and the existing customer base are expected to account for approximately 90% of the long-term model’s projected 20% CAGR through 2028. The reiteration of the Overweight rating and price target reflects KeyBanc’s positive outlook on Silicon Labs’ strategic positioning and financial forecasts. Based on InvestingPro’s Fair Value analysis, the stock currently appears overvalued. For deeper insights into Silicon Labs’ financial health, growth prospects, and more than 30 additional key metrics, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Silicon Labs confirmed its financial guidance for the first quarter of 2025, projecting revenue between $175 million and $180 million. The company anticipates a GAAP gross margin of 54% to 56% and GAAP operating expenses around $128 million to $130 million. Non-GAAP operating expenses are projected slightly lower, between $103 million and $105 million, with non-GAAP diluted earnings (loss) per share estimated between $0.01 and $(0.19). Benchmark analyst Cody Acree upgraded Silicon Labs from Hold to Buy, setting a new price target of $160, citing the company’s resilience through industry challenges and expected positive shifts in fundamentals. Needham also raised its price target for Silicon Labs to $150, maintaining a Buy rating, following the company’s fourth-quarter results and first-quarter 2025 guidance that exceeded consensus estimates. The firm highlighted strong momentum in Continuous Glucose Monitors and Electronic Shelf Labels as key growth drivers. Needham noted Silicon Labs’ strategic focus on smart metering opportunities in India and Japan, along with improving inventory levels. These developments reflect a positive outlook for Silicon Labs amid evolving industry conditions.
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