Wang & Lee Group board approves 250-to-1 reverse share split
On Tuesday, Needham increased its price target for Silicon Labs (NASDAQ:SLAB) shares from $140.00 to $150.00, maintaining a Buy rating on the company. Currently trading at $136.12, the stock appears overvalued according to InvestingPro analysis. The revision follows Silicon Labs’ announcement of fourth-quarter results that were consistent with expectations and first-quarter 2025 guidance that was slightly above consensus estimates.
According to the research firm, Silicon Labs is on a growth trajectory that does not rely on a broader macroeconomic recovery. While InvestingPro data shows analysts expect a 25% revenue decline this year, the company’s management anticipates incremental growth each quarter through 2025. Needham highlighted several key points from the earnings report, including strong momentum in Continuous Glucose Monitors (CGMs) and Electronic Shelf Labels (ESLs). The analyst noted that the CGM business could account for approximately 10% of total revenue in the next 12-18 months.
Another focus for Silicon Labs is smart metering, with the company aiming to take advantage of a potential 250 million unit opportunity in India and a market refresh cycle starting in Japan. The report also mentioned that end customer inventory levels are improving and distribution channels remain relatively lean, with 56 days of inventory compared to a target of over 70 days.
Needham’s outlook for Silicon Labs is further bolstered by expectations of a gradual increase in Next (LON:NXT) Generation Gross Margins (NG GM) quarter over quarter, driven by design wins and product ramps. Despite a more conservative view on quarter-over-quarter revenue growth through 2025, the firm raised its price target to $150, based on a 35x multiple of the company’s projected CY27 earnings per share.
In other recent news, Silicon Labs announced its third-quarter 2024 results, reporting a revenue of $166 million. This represents a 14% increase from the previous quarter but an 18% decline from the same period last year, with excess inventory issues cited as the primary cause. Despite this, the company anticipates a gradual recovery in demand extending into 2025.
Stifel, during a recent analysis, maintained a positive outlook on Silicon Labs, reiterating a Buy rating with a $135.00 price target. This endorsement followed the firm’s participation in Silicon Labs’ Virtual Works With 2024 IoT developer conference. The conference underscored the significant role of artificial intelligence (AI) in propelling the adoption of IoT networks and devices.
Silicon Labs also showcased its advanced Series 3 connectivity platform at the event. This next-generation technology, now in the sampling phase, offers substantial improvements in processing capabilities to meet growing demands at the edge of networked technology. These recent developments underline Stifel’s confidence in Silicon Labs’ potential within the IoT space, backed by the company’s technological advancements and strategic positioning within the industry.
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