Silicom (SILC) AI Stock Analysis

• Market Cap: $101.11M
• Dividend Yield: N/A
• Average Volume (3M): 15.22K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: -24.50%
• EPS Growth: 60.82%
• Country: US
• Employees: 260
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): -0.35
• Shares Outstanding: 5,696,565
• 10 Day Avg. Volume: 24,100
• 30 Day Avg. Volume: 15,221
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.30
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 1.79
• Enterprise Value/Ebitda: -2.66
• 1Y Price Target: $16.00
• Price Target Upside: -7.46% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 57 Neutral
• Price Target: $16.00 ▼(-7.46% Downside)

Silicom's overall stock score reflects significant financial challenges, including declining revenue and profitability. However, strong cash flow management and a solid balance sheet provide a buffer. The earnings call offers optimism for future growth, but current valuation and technical indicators suggest caution.

Positive Factors

Strong Balance Sheet

A strong balance sheet with substantial cash reserves and no debt provides Silicom with financial flexibility to invest in growth opportunities and weather economic downturns.

Design Win Momentum

The achievement of major new Design Wins indicates strong demand for Silicom's products and enhances its competitive position in key markets, supporting long-term revenue growth.

High Gross Margin

Maintaining a high gross margin reflects efficient cost management and pricing power, which can contribute to sustainable profitability and competitive advantage.

Negative Factors

Declining Revenue

Significant revenue decline indicates challenges in market demand or competitive pressures, potentially impacting long-term growth and profitability.

Operating Loss

Persistent operating losses suggest ongoing operational inefficiencies or cost pressures, which could hinder the company's ability to achieve profitability and fund future growth.

Increased Net Loss

An increasing net loss highlights financial challenges and may limit the company's ability to invest in strategic initiatives, affecting long-term business prospects.

Silicom Business Overview & Revenue Model

Company Description

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server-based systems, and communications devices in the United States, North America, Israel, Europe, and the Asia Pacific. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; edge devices for SD-WAN and NFV deployments; and distributed units for the 5G mobile infrastructure market. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider customers. The company was incorporated in 1987 and is headquartered in Kfar Sava, Israel.

How the Company Makes Money

Silicom 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 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 17.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SILC, the sentiment is Neutral. The current price of 17.29 is below the 20-day moving average (MA) of 17.47, above the 50-day MA of 16.61, and above the 200-day MA of 15.71, indicating a neutral trend. The MACD of 0.32 indicates Positive momentum. The RSI at 50.99 is Neutral, neither overbought nor oversold. The STOCH value of 27.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SILC.

Silicom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTRX	63 Neutral	178.53M	-15.49	-15.29%	―	-23.33%	-142.22%
SILC	57 Neutral	$101.11M	―	-10.16%	―	-24.50%	60.82%
KVHI	57 Neutral	111.96M	-17.76	-7.97%	―	-12.22%	71.69%
INSG	55 Neutral	216.77M	43.91	-61.70%	―	-10.99%	―
AIRG	50 Neutral	48.92M	-7.00	-28.05%	―	6.84%	49.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Silicom Corporate Events

Silicom Secures Major Design Win with Network Optimization Customer

On September 4, 2025, Silicom Ltd. announced a significant development with a long-term network optimization customer selecting Silicom Edge Systems for its next-generation platforms. This new design win is expected to increase the customer’s annual business with Silicom to approximately $4 million. The decision underscores the strength of Silicom’s product portfolio and its ongoing partnership with the customer, highlighting the company’s ability to expand its market presence and enhance its industry positioning.

Silicom Ltd. Reports Q2 2025 Financial Results Amidst Strong Design Win Momentum

On July 31, 2025, Silicom Ltd. announced its financial results for the second quarter of 2025, reporting revenues of $15.0 million, a slight increase from the previous year. Despite this, the company experienced a net loss of $3.3 million on a GAAP basis, compared to a $1.5 million loss in the same quarter of 2024. Silicom’s management highlighted strong Design Win momentum and a robust pipeline, positioning the company for future growth, with expectations of double-digit revenue growth beginning in 2026.

Silicom Secures Major Design Win with US Provider for Edge Networking

On July 7, 2025, Silicom Ltd. announced a significant Design Win with a US-based provider for its Edge-based networking solutions. This partnership involves deploying a customized advanced Edge device to improve scalability, security, and efficiency, with an expected annual run rate of $1 million. The collaboration highlights Silicom’s reputation as a trusted technology partner, with potential for substantial multi-million-dollar revenue growth through additional projects and further customization opportunities.

Silicom to Announce Q2 2025 Financial Results on July 31

On July 1, 2025, Silicom Ltd. announced that it will release its second quarter 2025 financial results on July 31, 2025. The company will host a conference call on the same day to discuss the results and address investor questions. This announcement is part of Silicom’s ongoing efforts to maintain transparency with its stakeholders and provide insights into its financial performance.