Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
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, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- SLAB's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.18, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 96.02% to $24.96 million 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 -75.37%.
- The gross profit margin for SILICON LABORATORIES INC is rather high; currently it is at 63.21%. 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 7.27% is significantly lower than the industry average.
- SILICON LABORATORIES INC's earnings per share declined by 45.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SILICON LABORATORIES INC reported lower earnings of $1.14 versus $1.48 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.14).
- SLAB, with its decline in revenue, slightly underperformed the industry average of 4.8%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Silicon Laboratories Inc., a fabless semiconductor company, designs, develops, and markets analog-intensive and mixed-signal integrated circuits (ICs). The company has a P/E ratio of 40.5, above the S&P 500 P/E ratio of 17.7. Silicon has a market cap of $1.99 billion and is part of the technology sector and electronics industry. Shares are up 6.6% year to date as of the close of trading on Friday.
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