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NEW YORK (TheStreet) -- Silicon Laboratories (SLAB) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
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 multiple strengths, 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 revenue growth, 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."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SLAB's revenue growth trails the industry average of 18.7%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 2.62, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 51.79% to $44.17 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.84%.
- The gross profit margin for SILICON LABORATORIES INC is rather high; currently it is at 62.73%. 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 3.54% is significantly lower than the industry average.
- SILICON LABORATORIES INC's earnings per share declined by 13.3% 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 ($1.99 versus $1.14).
- You can view the full analysis from the report here: SLAB Ratings Report