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 revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- SLAB's revenue growth has slightly outpaced the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SLAB's debt-to-equity ratio is very low at 0.12 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 2.95, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for SILICON LABORATORIES INC is rather high; currently it is at 65.71%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SLAB's net profit margin of 9.21% significantly trails the industry average.
- SILICON LABORATORIES INC has improved earnings per share by 10.3% 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 reported lower earnings of $1.14 versus $1.48 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $1.14).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 13.2% when compared to the same quarter one year prior, going from $12.61 million to $14.28 million.
Silicon Laboratories Inc., a fabless semiconductor company, designs and develops analog-intensive, mixed-signal integrated circuits (ICs). Silicon has a market cap of $1.74 billion and is part of the technology sector and electronics industry. Shares are down 5.6% year to date as of the close of trading on Tuesday.
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