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Here's How Wells Fargo Expects Silicon Lab To Fare In Q2

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  • Wells Fargo analyst Gary Mobley reiterated an Overweight rating and $170 price target on Silicon Laboratories, Inc (NASDAQ: SLAB).

  • 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.

Latest Ratings for SLAB

Date

Firm

Action

From

To

Mar 2022

Needham

Maintains

Buy

Dec 2021

Wells Fargo

Maintains

Overweight

Dec 2021

Morgan Stanley

Maintains

Equal-Weight

View More Analyst Ratings for SLAB

View the Latest Analyst Ratings

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