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Silicon Labs (SLAB) Surges 6.2%: Is This an Indication of Further Gains?

Silicon Laboratories (SLAB) shares rallied 6.2% in the last trading session to close at $126.11. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19% loss over the past four weeks.

Silicon Laboratories extended its rally, driven by its strength in IoT technology. Moreover, the company’s growing prospects in the booming IoT wireless market are aiding it in winning investors’ confidence. Further, its growing design wins are contributing well to its financial performance, which remains a positive.

This chipmaker is expected to post quarterly earnings of $1.13 per share in its upcoming report, which represents a year-over-year change of +232.4%. Revenues are expected to be $270.17 million, up 46.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Silicon Labs, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SLAB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Silicon Labs is part of the Zacks Semiconductor - Analog and Mixed industry. Monolithic Power (MPWR), another stock in the same industry, closed the last trading session 2.7% higher at $438.78. MPWR has returned -19.7% in the past month.

Monolithic's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $3.49. Compared to the company's year-ago EPS, this represents a change of +69.4%. Monolithic currently boasts a Zacks Rank of #2 (Buy).


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