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Silicom Ltd (SILC)
NASDAQ:SILC
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Silicom
(NASDAQ:SILC)
Rating:57Neutral
Price Target:
$16.00
▼(-4.76% Downside)
Positive Factors
Business Development
Management relayed strong progress with 2 new major design wins, totaling 5 year-to-date of its targeted 7-9.
Revenue Growth
Revenue growth of 4% year-over-year was the highest in 9 quarters.
Negative Factors
Financial Performance
SILC appears poised to sustain losses until a return to break-even, conservatively modeled exiting the year.
Silicom (SILC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$95.59M
Dividend YieldN/A
Average Volume (3M)20.01K
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth-24.50%
EPS Growth60.82%
CountryUS
Employees260
SectorTechnology
Sector Strength83
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.35
Shares Outstanding5,696,565
10 Day Avg. Volume12,027
30 Day Avg. Volume20,007
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.32
Enterprise Value/Revenue0.52
Enterprise Value/Gross Profit1.79
Enterprise Value/Ebitda-2.66
Forecast
1Y Price Target
$16.00Price Target Upside-4.76% Downside
Rating ConsensusHold
Number of Analyst Covering2
Silicom Business Overview & Revenue Model
Company DescriptionSilicom Ltd. (SILC) is a leading provider of high-performance networking and communications solutions, specializing in network interface cards (NICs), data processing units (DPUs), and other connectivity products. Operating primarily in the telecommunications, data center, and enterprise sectors, Silicom is committed to delivering innovative hardware and software solutions that enhance data transfer speeds, improve network efficiency, and support the growing demands of cloud computing and virtualization.
How the Company Makes MoneySilicom generates revenue through the sale of its hardware products, including network interface cards (NICs), data processing units (DPUs), and other networking equipment. The company primarily serves original equipment manufacturers (OEMs) and service providers, who integrate Silicom's products into their systems. Key revenue streams include direct sales to large enterprises and telecommunications companies, as well as partnerships with OEMs who embed Silicom's solutions in their offerings. Additionally, Silicom benefits from recurring revenue through maintenance and support contracts, which provide ongoing service and customer support. Strategic partnerships and collaborations with technology companies enhance its product offerings and market reach, contributing further to its earnings.
Silicom Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong Design Win momentum, robust financial positioning, and revenue growth, despite an operating and net loss. The company remains optimistic about future growth, especially in AI and security markets, despite currency-related expense challenges.Q2-2025 Updates
Positive Updates
Strong Design Win Momentum
Silicom achieved 5 major new Design Wins since the beginning of the year, with a target of 7 to 9 Design Wins for 2025. These wins include partnerships with a Fortune 500 cloud-based service provider, a global network test equipment leader, and a U.S.-based edge networking provider.
Robust Financial Position
The company reported $116 million in working capital and marketable securities, including $80 million in cash, with no debt. This positions Silicom to maintain investment in growth without compromise.
Revenue Growth
Revenue for the second quarter of 2025 was $15 million, a 4% increase over the $14.5 million reported in the same quarter of the previous year.
High Gross Margin
The gross profit for the second quarter of 2025 was $4.8 million, representing a gross margin of 31.9%, which is at the higher end of the company's expected range.
Negative Updates
Operating Loss
Silicom reported an operating loss of $2.4 million for the second quarter of 2025, unchanged from the same period in 2024.
Increased Net Loss
The company reported a net loss of $2 million for the quarter, compared to a net loss of $0.9 million in the second quarter of 2024.
Currency Impact on Expenses
Operating expenses were higher than expected due to the weaker U.S. dollar against the Israeli shekel and the Danish krone, affecting a large portion of expenses.
Company Guidance
During the Silicom Second Quarter 2025 Results Conference Call, the company reported a revenue of $15 million, aligning with the midpoint of their guidance range, and noted a strong balance sheet with $116 million in working capital and marketable securities, including $80 million in cash and equivalents. The company achieved 5 major new Design Wins since the start of the year and is on track to meet its goal of 7 to 9 Design Wins for 2025, with significant contributions from major sectors such as cloud-based services and edge networking. Silicom anticipates double-digit revenue growth from 2026, with projected revenues for the third quarter of 2025 ranging from $15 million to $16 million. Despite an operating loss of $2.4 million in the second quarter, the company remains optimistic about long-term growth, driven by a robust pipeline and strategic customer relationships. The geographical revenue distribution over the past 12 months was 74% from North America, 16% from Europe and Israel, and 10% from the Far East and the rest of the world.Silicom Financial Statement Overview
Summary
Silicom faces significant revenue and profitability challenges, with a negative net profit margin and declining revenue. However, the company maintains a strong balance sheet with low leverage and robust cash flow management, indicating potential for recovery.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 58.13M | 58.11M | 124.13M | 150.58M | 128.46M | 107.40M |
| Gross Profit | 16.83M | 16.60M | 28.69M | 51.96M | 44.39M | 33.77M |
| EBITDA | -11.34M | -11.07M | -616.00K | 22.34M | 15.49M | 8.63M |
| Net Income | -13.08M | -13.71M | -26.41M | 18.31M | 10.54M | 5.72M |
Balance Sheet | ||||||
| Total Assets | 149.69M | 150.41M | 167.73M | 216.20M | 219.60M | 195.89M |
| Cash, Cash Equivalents and Short-Term Investments | 72.09M | 72.14M | 54.93M | 34.75M | 37.55M | 60.79M |
| Total Debt | 6.23M | 6.47M | 5.95M | 7.84M | 9.19M | 10.10M |
| Total Liabilities | 25.01M | 22.57M | 19.47M | 36.90M | 61.14M | 41.05M |
| Stockholders Equity | 124.68M | 127.84M | 148.26M | 179.29M | 158.46M | 154.84M |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 17.36M | 29.71M | -8.78M | -5.08M | 1.77M |
| Operating Cash Flow | 0.00 | 18.29M | 31.93M | -4.09M | 1.08M | 4.96M |
| Investing Cash Flow | 0.00 | -4.28M | -7.52M | 8.27M | 16.77M | 15.43M |
| Financing Cash Flow | 0.00 | -9.88M | -7.97M | -1.05M | -9.78M | -16.52M |
Silicom Technical Analysis
Positive
16.80
Price Trends
15.91
Positive
15.31
Positive
15.43
Positive
Market Momentum
0.17
Negative
58.53
Neutral
79.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SILC, the sentiment is Positive. The current price of 16.8 is above the 20-day moving average (MA) of 16.04, above the 50-day MA of 15.91, and above the 200-day MA of 15.43, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 58.53 is Neutral, neither overbought nor oversold. The STOCH value of 79.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $176.96M | ― | -14.61% | ― | -23.33% | -142.22% | |
61 Neutral | $35.52B | 8.84 | -11.06% | 1.87% | 8.55% | -8.14% | |
57 Neutral | $95.59M | ― | -10.16% | ― | -24.50% | 60.82% | |
57 Neutral | $111.96M | ― | -4.46% | ― | -12.22% | 71.69% | |
55 Neutral | $192.70M | 40.34 | 111.75% | ― | -10.99% | ― | |
50 Neutral | $50.59M | ― | -21.97% | ― | 6.84% | 49.74% | |
| ― | $48.55M | ― | -4.62% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
SILC
Silicom
16.80
3.72
28.44%
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AIRG
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4.37
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-41.89%
INSG
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13.24
-2.32
-14.91%
FKWL
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4.11
-0.03
-0.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.