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Silicom (SILC) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Silicom disclosed 50 risk factors in its most recent earnings report. Silicom reported the most risks in the “Ability to Sell” category.

Risk Overview Q4, 2020

Source: the company's latest filing for the period ended Dec 31, 2020, filed Apr 28, 2021

Risk Distribution
50Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

No filing history is available.

Risks removedRisks addedRisks changedSilicom Risk Factors
Risk Changed (6)
  • Share Price & Shareholder Rights - Risk 1
    If we fail to meet continued listing standards of NASDAQ, our shares may be delisted, which could have a material adverse effect on the liquidity of our shares.

    Our ordinary shares are currently traded on the NASDAQ Global Select Market. The NASDAQ has requirements that a company must meet in order to remain listed on NASDAQ. In particular, NASDAQ rules require us to maintain a minimum bid price of US$ 1.00 per share of our ordinary shares. If the closing bid price of our common stock were to fall below US$ 1.00 per share for 30 consecutive trading days or we do not meet other listing requirements, we would fail to be in compliance with NASDAQ's listing standards. There can be no assurance that we will continue to meet the minimum bid price requirement, or any other requirement in the future. If we fail to meet the minimum bid price requirement, the NASDAQ Stock Market may initiate the delisting process with a notification letter. If our ordinary shares were to be delisted, our liquidity would be adversely affected and our market price could decrease.

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Production (3)
Ability to Sell (1)

Risk Highlights Q4, 2020

Main Risk Category
Ability to Sell
With 17 Risks
Number of Disclosed Risks
50
+5
From last report
S&P 500 Average: 32
Recent Changes
5Risks added
0Risks removed
6Risks changed
Since Dec 2020
Number of Risk Changed
6
+6
From last report
S&P 500 Average: 1

Risk Word Cloud

the decrease in demand for basic/standard server adapters may adversely affect our business.basic/standard server adaptersthe short lead time of customer orders combined with the long lead time of our suppliers when ordering certain components for our products could result in either a surplus or lack of sufficient supplies, and may negatively impact on our financial results.lack of sufficient suppliesrapid development of our business in the cloud, telco, mobile and related service providers' markets may lead to a decrease in our gross margins which may result in a decrease in our profitability.rapid development of our businessinability to cooperate with and receive information from our key component manufacturers could affect our ability to develop new products required by our customers and by the industry in which we operate.affect our ability to developthe market for edge networking devices to telcos and service providers for nfv or sd-wan deployments is rapidly developing, and if it develops in ways that are different from what we anticipate or expect, our business could be harmed.edge networking devices to telcosrapid development of our business in the cloud-based, telco and service providers' markets may require us to offer our potential customers with longer payment terms in order to better position ourselves in these markets, to hold higher inventory levels and to increase our need for working capital significantly.to hold higher inventory levelssignificant disruptions of our information technology systems or breaches of our data security could adversely affect our business.breaches of our data securitythe trading volume of our shares has been low in the past and may be low in the future, resulting in lower than expected market prices for our shares.trading volume of our sharesdifficulties in the fulfillment of financial obligations of one or more of our customers may have an adverse effect on our ability to consummate the collection of consideration payable under purchase orders placed by, or invoiced to, such customers under one or more design wins in relation to which such customers operate.collection of consideration payableif we are characterized as a passive foreign investment company for u.s. federal income tax purposes, our u.s. shareholders may suffer adverse tax consequences.federal income tax purposes

Risk Factors Full Breakdown - Total Risks 50

Competition1 | 2.0%
  • Competition - Risk 1
    The market for our products is highly competitive and some of our competitors may be better positioned than us.

    The market for our products is highly competitive. We face competition from numerous companies, some of whom are more established, benefit from greater market recognition and have greater financial, production and marketing resources than we do. For example, as further detailed in "Item 4.B – Business Overview – Competition", with respect to Server Adapters, our main competitors are Mellanox (recently acquired by Nvidia), Intel, and Broadcom. However, these companies do not generally operate in our target markets of smaller Cloud accounts and major Cloud accounts which seek solutions not competing with the standard cards offered by these large corporations, in which markets, our main competitors are Interface Masters, Portwell, Caswell, Lanner and Adlink, who compete with us on customized solutions including bypass cards. In the Smart Cards products sector, our competition is fragmented and differs with respect to the specific solution being offered by us. In this sector, Cavium (now a part of Marvel), Mellanox, Netronome, Napatech, Myricom (a subsidiary of CSP), Bittware and Nallatech (both now a part of Molex), Lanner and Caswell compete with certain of our Smart Cards. In some cases of FPGA based cards, Intel and Xilinx (recently acquired by AMD) also compete with our Smart Cards, however, similarly to the Server Adapters space, they target mostly the biggest accounts and only with mainstream products, while for other accounts they cooperate with us. In the Smart Platforms products sector, our competition is fragmented, and differs with respect to the specific solution offered by us. With respect to our uCPE products, to our knowledge our main competitors are Caswell, Lanner, Advantech and Nexcom. With respect to the Integrated Distributed Units ("DU"s), there is significant competition for the platform of a DU only (by all server manufacturers) and competition for the Smart Cards which go inside (as mentioned above). There may be other solutions which might also compete with our other products. We cannot guarantee that our present or contemplated products will continue to be distinguishable from those of our competitors or that the marketplace will find our products preferable to those of our competitors. Furthermore, there can be no assurance that competitive pressures will not result in price reductions that could materially adversely affect our business, results of our operations and financial condition.

Demand7 | 14.0%
Sales & Marketing9 | 18.0%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.