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Silicom (SILC)
:SILC
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Silicom
(NASDAQ:SILC)
Rating:57Neutral
Price Target:―
Positive Factors
Design Wins
Management reported strong progress with now 3 major design wins completed.
Revenue Growth
Revenue growth inflected to positive for the first time in 7 quarters.
Negative Factors
Earnings Performance
EPS was below analyst estimates.
Inventory Challenges
Revenues declined 23% y/y due to significant inventory at its major customers, leading to a sizable Operating Loss.
Silicom (SILC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$84.88M
Dividend YieldN/A
Average Volume (3M)15.01K
Price to Earnings (P/E)―
Beta (1Y)0.95
Revenue Growth-42.62%
EPS Growth61.22%
CountryUS
Employees260
SectorTechnology
Sector Strength77
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.37
Shares Outstanding5,696,565
10 Day Avg. Volume7,493
30 Day Avg. Volume15,010
Financial Highlights & Ratios
PEG Ratio-2.52
Price to Book (P/B)0.69
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.48
Enterprise Value/Revenue0.14
Enterprise Value/Gross Profit2.44
Enterprise Value/Ebitda-0.71
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
Silicom Business Overview & Revenue Model
Company DescriptionSilicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server-based systems, and communications devices in the United States, North America, Israel, Europe, and the Asia Pacific. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; edge devices for SD-WAN and NFV deployments; and distributed units for the 5G mobile infrastructure market. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider customers. The company was incorporated in 1987 and is headquartered in Kfar Sava, Israel.
How the Company Makes MoneySilicom generates revenue primarily through the sale of its networking and connectivity hardware products. The company's key revenue streams include direct sales to original equipment manufacturers (OEMs), service providers, and system integrators who incorporate Silicom's products into their own solutions. Additionally, Silicom benefits from strategic partnerships and collaborations with leading technology companies, which help to expand its market reach and drive sales. The company's focus on innovation and high-performance solutions enables it to maintain competitive pricing and secure recurring business from its established customer base.
Silicom Financial Statement Overview
Summary
Silicom faces challenges in revenue and profitability with significant net losses and declining revenue growth. However, the company maintains a strong balance sheet with low leverage and robust cash flow management, providing some resilience against financial pressures.Income Statement
Silicom has faced significant challenges in maintaining revenue and profitability. The company reported a negative net profit margin and EBIT margin for 2024, indicating ongoing operational difficulties. Revenue declined sharply in 2024, reflecting a revenue growth rate of -53.2% from the previous year. Historically, Silicom has experienced fluctuating revenue growth, with a significant drop post-2022, affecting overall profitability and stability.45
Neutral
Balance Sheet
Silicom demonstrates a solid equity base with a high equity ratio of 85.0% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.05, suggesting minimal leverage risk. However, the return on equity has been negative due to net losses, impacting overall returns to shareholders. The company maintains a significant cash position, which supports its financial resilience despite recent losses.60
Neutral
Cash Flow
Silicom's cash flow position is relatively strong, with a positive operating cash flow to net income ratio of -1.33 in 2024, indicating effective cash generation relative to reported losses. The company has shown consistent free cash flow generation, with a positive free cash flow in 2024 despite declining operating income. This provides a cushion for operational needs and potential investments, highlighting robust cash flow management.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 58.11M | 124.13M | 150.58M | 128.46M | 107.40M | Gross Profit |
| 16.60M | 28.69M | 51.96M | 44.39M | 33.77M | EBIT |
| -13.28M | -28.67M | 19.93M | 13.06M | 6.25M | EBITDA |
| -11.07M | -616.00K | 22.34M | 15.49M | 8.63M | Net Income Common Stockholders |
| -13.71M | -26.41M | 18.31M | 10.54M | 5.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 72.14M | 54.93M | 34.75M | 37.55M | 60.79M | Total Assets |
| 150.41M | 167.73M | 216.20M | 219.60M | 195.89M | Total Debt |
| 6.47M | 5.95M | 7.84M | 9.19M | 10.10M | Net Debt |
| -44.82M | -41.02M | -22.89M | -20.10M | -10.58M | Total Liabilities |
| 22.57M | 19.47M | 36.90M | 61.14M | 41.05M | Stockholders Equity |
| 127.84M | 148.26M | 179.29M | 158.46M | 154.84M |
| Cash Flow | Free Cash Flow | |||
| 17.36M | 29.71M | -8.78M | -5.08M | 1.77M | Operating Cash Flow |
| 18.29M | 31.93M | -4.09M | 1.08M | 4.96M | Investing Cash Flow |
| -4.28M | -7.52M | 8.27M | 16.77M | 15.43M | Financing Cash Flow |
| -9.88M | -7.97M | -1.05M | -9.78M | -16.52M |
Silicom Technical Analysis
Negative
14.17
Price Trends
14.46
Negative
15.56
Negative
14.60
Negative
Market Momentum
0.15
Positive
43.17
Neutral
42.60
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 14.17 is below the 20-day moving average (MA) of 14.93, below the 50-day MA of 14.46, and below the 200-day MA of 14.60, indicating a bearish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 43.17 is Neutral, neither overbought nor oversold. The STOCH value of 42.60 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% | |
58 Neutral | $84.39M | ― | -10.88% | ― | -2.06% | -22.58% | |
57 Neutral | $84.88M | ― | -8.55% | ― | -42.62% | 61.22% | |
56 Neutral | $123.66M | 24.39 | 111.75% | ― | 1.60% | ― | |
54 Neutral | $104.47M | ― | -6.78% | ― | -14.38% | 49.11% | |
49 Neutral | $47.53M | ― | -25.57% | ― | 8.46% | 39.81% |
* Technology Sector Average
Performance Comparison
SILC
Silicom
14.90
-1.14
-7.11%
KVHI
KVH Industries
5.33
0.23
4.51%
LTRX
Lantronix
2.17
-1.58
-42.13%
AIRG
Airgain
4.14
-1.18
-22.18%
INSG
Inseego
8.14
0.64
8.53%
Silicom Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 4.58%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
Silicom's call highlighted a strong strategic position and financial health with significant design wins and a positive outlook for future growth. However, there were concerns due to a lack of revenue growth, continued operating losses, and challenges related to excess customer inventory.Q1-2025 Updates
Positive Updates
Solid Start to 2025
Silicom's first quarter results reflect solid execution and progress in line with their strategic plan, aimed at renewing revenue growth and profitability.
Strong Financial Position
The company has a strong balance sheet with $119 million in working capital and marketable securities, including $77 million in cash, deposits, and highly-rated bonds, with no debt.
Significant Design Wins
Silicom secured three important new design wins in 2025 with cybersecurity leaders and a global network test equipment company, indicating progress towards their goal of 7 to 9 wins in the year.
Positive Long-term Outlook
Silicom is on track to return to a solid double-digit growth rate from 2026, aiming for an EPS above $3 based on revenues between $150 million and $160 million.
Negative Updates
No Revenue Growth Year-over-Year
Revenues for the first quarter of 2025 were $14.4 million, similar to the $14.4 million reported in the first quarter of last year, indicating no growth.
Continued Operating Loss
The company reported an operating loss of $2.4 million for the first quarter of 2025, compared to an operating loss of $2.7 million in the first quarter of 2024.
Net Loss
Silicom reported a net loss of $2.1 million for the first quarter of 2025, compared to a net loss of $2.4 million in the first quarter of 2024.
Excess Customer Inventory
Some customers still have excess inventory from previous periods, which may impact short-term orders and revenue growth.
Company Guidance
During the Silicom First Quarter 2025 Results Conference Call, the company provided guidance and insights into its strategic plans and financial expectations. Silicom reported revenues of $14.4 million for the first quarter of 2025, with a gross margin of 30.3%. The company emphasized its strong financial position, with $119 million in working capital and marketable securities, including $77 million in cash, deposits, and highly rated bonds. Silicom highlighted its strategic focus on achieving an EPS above $3 and annual revenues between $150 million and $160 million in the long term. They are targeting seven to nine new design wins in 2025, with three already secured in cybersecurity and networking sectors. For the second quarter of 2025, Silicom anticipates revenues between $14.5 million and $15.5 million and projects low-single-digit growth for the year, with an expectation of double-digit growth in 2026. The company underlined its commitment to maintaining strong customer relationships and leveraging its robust pipeline to ensure future growth.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.