NEW YORK (TheStreet) -- Silicon Laboratories (SLAB) shares were down -9.2% to $44.54 on Tuesday following the release of the company's first quarter earnings report.
The company reported revenue of $145.7 million, beating analysts estimates of $143.89 million.
Silicon Laboratories earnings per share were in line with analysts estimates of 42 cents per share for the quarter.
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TheStreet Ratings team rates SILICON LABORATORIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SILICON LABORATORIES INC (SLAB) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 -46.70%.
- Compared to its closing price of one year ago, SLAB's share price has jumped by 31.75%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 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 ($2.10 versus $1.14).
- SLAB, with its decline in revenue, slightly underperformed the industry average of 3.4%. 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.
- You can view the full analysis from the report here: SLAB Ratings Report