Thursday, February 1, 2018

Silicon Labs' IoT Energizer Bunny Keeps Going

Silicon Labs (SLAB) continues to leverage its opportunities in the fast-growing IoT market, and that continues to drive good revenue and profit growth for this relatively small semiconductor stock. Silicon Labs has moved aggressively, largely through M&A, to acquire a strong portfolio in wireless (especially mesh networking and connectivity) technologies, giving it a strong position in home/consumer IoT and allowing it to "punch above its weight" relative to some of its much larger rivals.

While I continue to expect good things for SLAB's IoT business, and I believe the Infrastructure business can leverage growth in optical and 5G deployments, the valuation is not forgiving. Growth and momentum investors likely won't care about the valuation, but with the stock trading at close to five times forward revenue, it may be challenging for the company to grow fast enough to substantially expand that multiple.

Read more here:
Silicon Labs' IoT Energizer Bunny Keeps Going

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