Silicon Labs stock holds $160 target, Benchmark affirms Buy rating

Wednesday, Benchmark analysts maintained a Buy rating and a price target of $160.00 on Silicon Labs (NASDAQ:SLAB), following the company’s first-quarter results. According to InvestingPro data, the stock has shown remarkable momentum with a 22.88% gain in the past week, while maintaining strong financial health with a current ratio of 5.17. Silicon Labs has continued its growth trajectory from the previous quarter, reporting a significant year-over-year and sequential increase in revenue, aligning with Wall Street’s sales estimates and slightly surpassing earnings expectations by $0.01.

Silicon Labs’ first-quarter performance demonstrated a 67% increase compared to the same period last year and a 7% rise from the previous quarter. The company’s guidance for the second quarter suggests sales ranging between $185 million and $200 million, with a midpoint of $192.5 million. This forecast exceeds the consensus estimate by $4.5 million and indicates an 8% quarter-over-quarter and 32% year-over-year growth. InvestingPro analysis reveals that analysts expect a robust 35% revenue growth for FY2025, with 5 analysts recently revising their earnings estimates upward.

The company’s earnings per share (EPS) for the second quarter are projected to be between -$0.01 and $0.19, with a midpoint of $0.09, which is $0.06 higher than analysts’ expectations. The positive outlook is supported by improved order patterns from customer bookings and point-of-sale (POS) transactions in distribution channels. These patterns have shown quarter-over-quarter improvement in the first quarter and have continued into the second quarter, suggesting that customer and channel inventories have stabilized and that the company’s end-markets are steadily recovering.

Benchmark’s analyst highlighted the steady progress in cyclical recovery within Silicon Labs’ end-markets and the normalization of inventories, which are positive indicators for the company’s performance. The reaffirmed price target and Buy rating reflect the analyst’s confidence in Silicon Labs’ growth and market position.

Silicon Labs, a leading provider of silicon, software, and solutions for a smarter, more connected world, has evidently managed to build on its momentum from the end of the last fiscal year, positioning itself for continued growth in the current quarter. The company’s guidance and the analyst’s reaffirmation of the stock’s potential underscore Silicon Labs’ robust performance and favorable outlook. For deeper insights into Silicon Labs’ valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis including 8 additional ProTips and detailed financial metrics in the Pro Research Report, available exclusively on the platform.

In other recent news, Silicon Labs reported its first-quarter 2025 earnings, surpassing expectations with revenue of $178 million, a 67% increase year-over-year, and an earnings per share (EPS) of -$0.08, beating the forecast of -$0.09. The company anticipates revenue for the second quarter to be between $185 million and $200 million, projecting a 32% year-over-year growth. JPMorgan reiterated its Overweight rating on Silicon Labs, maintaining a price target of $160, citing strong performance in the March quarter and expectations for continued sequential revenue growth. Citi analysts raised their price target for Silicon Labs to $140, maintaining a Neutral rating, reflecting the company’s robust performance in key segments and its design win ramps. Stifel analysts also increased their price target to $144, upholding a Buy rating, driven by the company’s successful financial report and upward revision of guidance. Silicon Labs has reduced channel inventories to new low levels, which is expected to support revenue and gross margins in the coming quarters. The company’s strategic focus on IoT solutions, particularly in connected healthcare and smart home technologies, continues to drive significant growth.

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