NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The gross profit margin for SILICON LABORATORIES INC is rather high; currently it is at 64.50%. Regardless of SLAB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLAB's net profit margin of 10.60% is significantly lower than the same period one year prior.
- SLAB, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- SILICON LABORATORIES INC's earnings per share declined by 34.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SILICON LABORATORIES INC increased its bottom line by earning $1.56 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.92 versus $1.56).
- Net operating cash flow has increased to $28.86 million or 34.72% when compared to the same quarter last year. In addition, SILICON LABORATORIES INC has also vastly surpassed the industry average cash flow growth rate of -77.00%.
- SLAB has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.69, which clearly demonstrates the ability to cover short-term cash needs.
Silicon Laboratories Inc. engages in the design and development of analog-intensive and mixed-signal integrated circuits (ICs). The company has a P/E ratio of 38.3, equal to the average electronics industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Silicon has a market cap of $1.9 billion and is part of the
industry. Shares are down 21.4% year to date as of the close of trading on Tuesday.
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