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Mobley expected his FY22-FY24 revenue estimates for SLAB to remain primarily unchanged following the 2Q22 results.
However, he found it possible for SLAB to record a high backlog to decrease modestly Q/Q due to incremental foundry supply exceeding new orders during 2Q22.
Overall, he believed SLAB's business momentum remained robust.
However, he also thought that the company saw some pockets of weakness within specific sub-segments of the Home & Life IoT business unit.
His re-rating factored in potential catalysts, including growth in the IoT business encompassing 40% revenue growth in FY21; 30% growth in FY22 modeled; 20% top-line growth over the LT; $14 billion opportunity pipeline today; Design win growth in ($) at a ~30% CAGR since 2016.
The rating also factored in significant OM leverage over the LT as IoT sales ramp up.
He also expected the management to revise LT financial targets upwards at the company's March 1 analyst day.
The price target reflected the scarcity value of SLAB's IoT assets, the valuation multiples paid for these assets in recent M&A comps, and the premium growth rate for SLAB after the sale.
Price Action: SLAB shares traded higher by 4.17% at $142.63 on the last check Wednesday.
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