Silicon Laboratories (SLAB) does not lack for growth opportunities. The company has one of the strongest portfolios of lower-power wireless connectivity assets for IoT (both consumer and industrial), a “good enough” microcontroller business for IoTs, and an underrated timing and isolator business that gives the company leverage to 5G and auto electrification. That 5G leverage certainly helped in the second quarter, allowing the company to post better revenue numbers than the average chip company.
My primary issue with Silicon Labs when I wrote about the company back in May was the valuation. Since then, the shares have lagged the SOX index by a fairly wide margin (about 20%) and the gap is wider than 50% over the past year. I often get pushback on this, but valuation matters – sooner or later. At this point, I still don’t believe Silicon Labs is undervalued on a long-term discounted cash flow basis (my preferred entry criteria), but I do see some modest upside on a margins/growth-driven basis.
Read more here:
Silicon Laboratories Beating And Raising On Healthy 5G And Improving IoT
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