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Silicom Ltd. Message Board

  • fish.andchips fish.andchips Oct 29, 2012 7:48 AM Flag

    SILC analysis

    Since we really don't have much coverage, I am taking a shot at providing a forecast and projections for next year's stock price.

    Year 2011 2012 2013
    Rev $39.6M $44.5M* $52-$53.4M
    Earnings $1.18 $1.43 $1.72-$1.77

    *I am assuming revenue of $12.5M and $.41/share for Q4 based on Mr. Orbach's comments on the conference call, and a 23% net for earnings.

    If you had listened carefully to the last 3 conference calls, these were the revenue numbers for SETAC: $900K/$700K/$2.1M. This expansion is the first indication the SETAC has starting to take hold and is what will also help earnings expansion and Silicom's growth rate

    I am using a conservative PE of 15-20 (based on $1.77) for next year and that will put the stock price in a range between $25.95-$34.60 based on revenue projections.

    The outlook into 2014 and beyond is very positive for the company as the transition to 40Gb will mean potential upgrades and additional migration to SETAC.


    Sentiment: Strong Buy

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    • Most of the technology sector has either missed or just hit lowered earnings numbers last quarter, which makes what Silicom did in the quarter that much more impressive. This on top of the closest thing we can call a forecast from the CEO on the call, that they would beat the 3rd quarter numbers shows that the company is simply doing what they said they were going to do, and that SETAC will become a much bigger part of revenue and earnings. Each design win they get puts another appliance provider in a better position to compete and will force the hands of their competitors. This is a very good position for Silicom and for those buying appliances as they now get better, faster and cheaper solutions.

      And like I said before, this will mean upgrades and and new opportunities once 40 Gb comes to market. There is a lot of growth potential for Silicom for many years.

      I hate doing all the work for the small cap analysts~~~~~are you guys listening?


      Sentiment: Strong Buy

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