Valuation is relative, and by no means am I saying that Silicon Labs (SLAB) is "cheap". But what I am saying is that given how the Street values pure-plays on growth markets (like IoT in this case), not to mention scarcity value and the quality of the portfolio, the shares aren't as ridiculously valued as you might immediately assume for a company trading at close to 6x 2022 revenue and around 80x 2022 P/E.
Silicon Labs has built an impressive wireless IoT portfolio, giving the company strong exposure to one of the fast-growing markets within semiconductors (consumer and industrial IoT). Provided that Silicon Labs can leverage its technology into industrial applications beyond metering, allowing it to fully participate in the growth of industrial IoT, I see a credible path to double-digit revenue growth and mid-20%'s margins in around five or six years.
None of that leads me to the conclusion that Silicon Labs is undervalued now, but in a semiconductor market where "not too expensive" is the new "cheap" for many stocks, it's at least worth a spot on a watchlist.
Read more here:
Silicon Labs Isn't As Expensive As You Might Think For A Pure IoT Growth Play
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