Silvaco Group, Inc.: Strategic Acquisitions and Revenue Growth Justify Buy Rating Despite Short-Term EPS Decline

Needham analyst Charles Shi has maintained their bullish stance on SVCO stock, giving a Buy rating on March 3.

Charles Shi has given his Buy rating due to a combination of factors impacting Silvaco Group, Inc.’s financial outlook. The company is expected to achieve a solid revenue growth of 15.5% in fiscal year 2025, aligning with market expectations. This growth is driven by both organic developments and the strategic acquisition of the OPC product line from CDNS, which, although initially contributing modestly to revenue, is anticipated to enhance revenue more significantly by 2026.
Despite the projected decline in earnings per share (EPS) for 2025, attributed to increased research and development expenses and the integration costs of the new acquisition, the long-term outlook remains positive. The company expects improved operational efficiency as it integrates the new business, which should lead to better cost management. Consequently, while short-term profitability might be impacted, the strategic investments and anticipated revenue growth justify the Buy rating.

According to TipRanks, Shi is a 2-star analyst with an average return of -0.4% and a 34.50% success rate. Shi covers the Technology sector, focusing on stocks such as Cohu, Lam Research, and Applied Materials.