Market Overview

Citi: Atmel's Valuation Means Silicon Labs Is Worth $50

Share:
Citi: Atmel's Valuation Means Silicon Labs Is Worth $50

Citi recently issued a report on Silicon Laboratories (NASDAQ: SLAB) after the company beat Wall Street EPS expectations for the December quarter and offered guidance for the March quarter that was in line with expectations. Currently, analysts at Citi rate Silicon Labs as a Buy with a lowered price target from $58 to $50.

Atif Malik and Amanda Scarnati, analysts at Citi, wrote, "We continue to view SLAB as a small cap IoT consolidator in semis in 2016 and we also believe that they are an attractive acquisition target. SLAB has a strong product portfolio and grew top line at a 5 percent CAGR between 2012 and 2015 vs. microcontroller peer ATML declining at a 6 percent CAGR over the same period. We contend that SLAB would garner a 15 percent+ premium to ATML's 2.8x TTM sales takeout price offered by MCHP."

Related Link: Citi: Buy Walgreens' Core, Rite Aid Is A Bonus

Highlights

Analysts at Citi highlighted two key points that could drive Silicon Lab's stock price higher:

  • 1. Valuation
  • Citi noted that Atmel Corporation (NASDAQ: ATML), a competitor of Silicon Labs, is currently valued at over $8 per share. The analysts shared their belief that if a competitor has this high a valuation, then Silicon Labs has the potential to be worth $50 per share.

  • 2. Organic Revenue Growth
  • Analysts at Citi wrote that Silicon Labs grew their Internet of Things platform by $50 million with infrastructure growth growing 13 percent year over year. As a majority of this growth was organic, Citi believes that this growth has the potential to accelerate in 2016, as the market continues to adopt new technology around home automation and industrial applications of the IoT platform.

At the time of this writing, Silicon Labs was trading at $41.15, down 2.35 percent. Atmel Corporation was trading flat on the day at $8.05.

Image Credit: Public Domain

Latest Ratings for SLAB

DateFirmActionFromTo
Apr 2020BenchmarkMaintainsBuy
Apr 2020BarclaysMaintainsEqual-Weight
Mar 2020CitigroupMaintainsBuy

View More Analyst Ratings for SLAB
View the Latest Analyst Ratings

 

Related Articles (ATML + SLAB)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Short Ideas Price Target Analyst Ratings Movers Tech

Latest Ratings

StockFirmActionPT
MRVLCFRAMaintains35.0
CSIQCFRAUpgrades22.0
MGNXSVB LeerinkMaintains27.0
EVCFRAMaintains43.0
RCUSSVB LeerinkReiterates42.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com