There's A Growing Separation Between Silicon Labs' Long-Term Potential And The Current Valuation

 

Second chances to buy strong growth stocks are always worth a look, particularly if there doesn't seem to be anything broken with the fundamental growth story. Such would seem to be the case at Silicon Labs (NASDAQ:SLAB). I can understand some disappointment with management not guiding to stronger longer-term profitability at the recent Analyst Day, but the core IoT growth story (driven by strong wireless capabilities at SLAB) is still very much intact.

Clearly, there are a lot of factors beyond Silicon Labs to consider now. The market is clearly not as interested in growth stocks now, and the semiconductor sector has weakened in light of the increasing likelihood that peak growth and margins have been seen (or are in sight) for the cycle. It will take time for those issues to work themselves out, but I still see Silicon Labs as a double-digit grower and that makes the stock valuation today considerably more interesting.

 

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There's A Growing Separation Between Silicon Labs' Long-Term Potential And The Current Valuation