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Silicom Ltd (SILC)
NASDAQ:SILC
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Silicom
(NASDAQ:SILC)
62Neutral
Positive Factors
Financial Stability
Management affirms the company has sufficient cash to alleviate Balance Sheet concerns until a return to operating margin break-even in approximately 2 years.
Future Growth Prospects
Management outlined in great detail the company's design win pipeline, including two expected to ramp materially in early 2026.
Negative Factors
Revenue Decline
Revenues are down over 50% year-over-year due to significant inventory at its major customers, leading to sizable operating losses.
Silicom (SILC) vs. S&P 500 (SPY)
Market Cap
$92.22M
Dividend YieldN/A
Average Volume (3M)16.41K
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth-53.18%
EPS Growth49.22%
CountryUS
Employees246
SectorTechnology
Sector Strength45
IndustryHardware & Equipment
Share Statistics
EPS (TTM)-2.00
Shares Outstanding6,098,926
10 Day Avg. Volume15,517
30 Day Avg. Volume16,415
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.79
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
Silicom Business Overview & Revenue Model
Company DescriptionSilicom Ltd. (SILC) is a technology company operating within the networking and communications equipment sectors. It specializes in the design, development, and manufacturing of high-performance networking and data infrastructure solutions. The company's core products include network interface cards, server adapters, and intelligent networking appliances, catering primarily to data centers, enterprise networks, and telecommunication service providers.
How the Company Makes MoneySilicom generates revenue through the sale of its networking and data infrastructure solutions. The company's key revenue streams include the direct sale of its hardware products, such as network interface cards and intelligent networking appliances, to data centers, enterprise networks, and telecom operators. Silicom also engages in strategic partnerships and collaborations with original equipment manufacturers (OEMs) and other technology firms to integrate its solutions into broader systems, enhancing their value proposition and expanding market reach. These partnerships often contribute significantly to its earnings by amplifying sales channels and customer base.
Silicom Financial Statement Overview
Summary
Silicom's financial performance is mixed. While the balance sheet shows low leverage with a high equity ratio and improved cash flow, the income statement reveals significant profitability issues and declining revenue. The company faces challenges in restoring growth and profitability.Income Statement
Silicom's latest annual financials reveal a significant downturn in profitability, with the company experiencing a negative net profit margin of -21.3% due to a negative net income of $26.41 million. The gross profit margin decreased to 23.1% from the previous year's 34.5%. Revenue dropped by 17.6%, indicating a challenging market environment or operational issues. Positive EBITDA margin trends were reversed, turning negative at -0.5%, driven by reduced total revenue and increased operational costs. The financial performance reflects significant challenges that need strategic interventions to restore growth and profitability.45
Neutral
Balance Sheet
The balance sheet shows a robust equity ratio of 88.4%, indicating strong equity financing with low reliance on debt. The debt-to-equity ratio is low at 0.04, reflecting a conservative approach to leverage. However, the return on equity (ROE) has turned negative at -17.8%, primarily due to net losses incurred. While the company maintains a healthy cash position, declining equity year-over-year poses concerns about future financial stability.70
Positive
Cash Flow
Silicom's cash flow statement highlights a strong recovery in operating cash flow to $31.93 million, positively impacting the free cash flow, which stands at $29.71 million, a significant improvement from the previous year's negative figure. The operating cash flow to net income ratio is negative due to the net loss, but the cash flow from operations indicates sound underlying cash generation capabilities despite the reported losses. Continued positive cash flow trends are crucial for supporting operations and strategic investments.65
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 77.69M | 124.13M | 150.58M | 128.46M | 107.40M | 105.24M | Gross Profit |
| 13.04M | 28.69M | 51.96M | 44.39M | 33.77M | 36.09M | EBIT |
| -17.75M | -28.67M | 19.93M | 13.06M | 6.25M | 10.21M | EBITDA |
| -16.30M | -616.00K | 22.34M | 15.49M | 8.63M | 12.21M | Net Income Common Stockholders |
| -15.25M | -26.41M | 18.31M | 10.54M | 5.72M | 10.24M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.64M | 54.93M | 34.75M | 37.55M | 60.79M | 44.06M | Total Assets |
| 185.53M | 167.73M | 216.20M | 219.60M | 195.89M | 195.06M | Total Debt |
| 3.62M | 5.95M | 7.84M | 9.19M | 10.10M | 3.78M | Net Debt |
| -14.78M | -41.02M | -22.89M | -20.10M | -10.58M | -12.69M | Total Liabilities |
| 23.03M | 19.47M | 36.90M | 61.14M | 41.05M | 32.14M | Stockholders Equity |
| 162.50M | 148.26M | 179.29M | 158.46M | 154.84M | 162.92M |
| Cash Flow | Free Cash Flow | ||||
| 939.00K | 29.71M | -8.78M | -5.08M | 1.77M | 24.27M | Operating Cash Flow |
| 939.00K | 31.93M | -4.09M | 1.08M | 4.96M | 26.73M | Investing Cash Flow |
| 0.00 | -7.52M | 8.27M | 16.77M | 15.43M | -29.61M | Financing Cash Flow |
| 0.00 | -7.97M | -1.05M | -9.78M | -16.52M | -7.82M |
Silicom Technical Analysis
Negative
15.40
Price Trends
16.69
Negative
15.38
Negative
14.83
Positive
Market Momentum
-0.40
Positive
37.06
Neutral
20.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SILC, the sentiment is Negative. The current price of 15.4 is below the 20-day moving average (MA) of 16.25, below the 50-day MA of 16.69, and above the 200-day MA of 14.83, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 37.06 is Neutral, neither overbought nor oversold. The STOCH value of 20.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SILC.
Silicom Risk Analysis
Silicom disclosed 50 risk factors in its most recent earnings report. Silicom reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Silicom Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $867.27B | 93.94 | 14.85% | 1.18% | 40.30% | -22.79% | |
73 Outperform | $69.39B | 45.83 | 129.87% | 0.97% | 8.41% | -7.83% | |
72 Outperform | $8.41B | 138.14 | 8.71% | ― | -30.90% | -76.39% | |
63 Neutral | $11.58B | 22.25 | 8.34% | 3.83% | -12.91% | -42.12% | |
62 Neutral | $92.22M | ― | -8.64% | ― | -53.18% | 49.22% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
45 Neutral | $990.21M | ― | -40.78% | ― | -48.00% | -227.62% |
* Technology Sector Average
Performance Comparison
SILC
Silicom
15.40
0.10
0.65%
AVGO
Broadcom
190.09
62.62
49.13%
LSCC
Lattice Semiconductor
58.62
-22.61
-27.83%
MXL
Maxlinear
11.94
-7.71
-39.24%
MSI
Motorola Solutions
411.73
74.70
22.16%
SWKS
Skyworks Solutions
68.23
-37.63
-35.55%
Silicom Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -12.95% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Silicom demonstrated strong strategic momentum with significant design wins and a solid financial position, indicating potential for future growth. However, current financial metrics, including revenue declines and increased losses, present challenges in the short-term.Highlights
Strong Design Win Momentum
Silicom achieved significant design win momentum, increasing the visibility of potential mid to long-term revenue growth. Potential revenues from recent wins are expected to ramp up from 2026.
Cash Generation and Share Buyback
Silicom generated $17.3 million in cash during 2024, with $10 million used to repurchase shares as part of its ongoing buyback plan, highlighting its strategy of shareholder value creation.
Strong Financial Position
Silicom's balance sheet strength is highlighted by working capital and marketable securities amounting to $121 million, including $79 million in cash deposits and highly rated bonds with no debt.
New Design Wins
Silicom announced two major design wins: one with a U.S.-based cybersecurity company and another with a global networking and security as a service leader, with expected revenues ramping up from 2025.
Future Growth Prospects
Silicom aims to achieve 7 to 9 additional design wins in 2025, with expectations of double-digit growth from 2026 onwards.
Lowlights
Revenue and Profit Decline
Revenues for Q4 2024 were $14.5 million, a decline from $18.8 million in Q4 2023. The company reported a net loss of $3.4 million compared to a net loss of $0.5 million in the same quarter last year.
Operating Loss Increase
Silicom reported an operating loss of $2.7 million for Q4 2024, compared to an operating loss of $1.5 million in Q4 2023.
Low Short-term Growth Expectations
Revenues for the first quarter of 2025 are expected to remain stable at $14-$15 million, with growth in 2025 expected to be in the low-single-digits.
Company Guidance
During the Silicom Fourth Quarter 2024 Results Conference Call, the company provided guidance for the upcoming fiscal period, focusing on their strategic growth plans and financial expectations. For the first quarter of 2025, Silicom anticipates stable revenues between $14 million and $15 million, while projecting low-single-digit growth for the entire year. They highlighted a strong pipeline of opportunities, targeting 7 to 9 new design wins in 2025, which they expect to ramp up significantly by 2026, leading to a return to strong double-digit growth. Silicom aims to achieve an EPS above $3 with annual revenues between $150 million and $160 million. The company also emphasized their solid balance sheet, with $121 million in working capital and marketable securities, including $79 million in cash deposits and highly rated bonds, and continued their share repurchase program to enhance shareholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.