Silvaco Group, Inc.: Strategic Acquisitions and Growth Potential Amidst Revenue Challenges

In a report released today, Krish Sankar from TD Cowen reiterated a Buy rating on Silvaco Group, Inc. (SVCO – Research Report), with a price target of $10.00.

Krish Sankar has given his Buy rating due to a combination of factors that highlight both the challenges and opportunities for Silvaco Group, Inc. Despite a recent miss in revenue expectations for March ’25, largely due to order pushouts, the company is expected to see a ramp-up in the latter half of the year. The strategic acquisitions of Cadence’s PPC group and Tech-X are seen as positive moves that will contribute to the company’s growth, adding an estimated $600M to the serviceable available market.
While the sales outlook for CY25 has been tempered to a 12% year-over-year growth, aligning with industry peers, the potential for future applications in the SiC market and the addition of nine new customers during the quarter are promising signs. However, there are some mixed factors, such as the operational expense headwinds from the acquisitions and the potential obscurity in comparable metrics due to new annual contract values. Nonetheless, the expectation of a return to higher gross margins and strong order bookings growth in the second half of the year supports the Buy rating.

In another report released today, Rosenblatt Securities also maintained a Buy rating on the stock with a $14.00 price target.