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Silicom Ltd (SILC)
NASDAQ:SILC
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Silicom
(NASDAQ:SILC)
Rating:65Neutral
Price Target:
$19.00
▲(18.60% Upside)
Positive Factors
Business Development
Management relayed strong progress with 2 new major design wins, totaling 5 YTD of its targeted 7-9 during C25.
Revenue Growth
Revenue growth of 4% y/y was the highest in 9 quarters.
Negative Factors
Financial Performance
Revenues declined 23% y/y due to significant inventory at its major customers, leading to a sizable Operating Loss.
Silicom (SILC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$90.29M
Dividend YieldN/A
Average Volume (3M)20.46K
Price to Earnings (P/E)―
Beta (1Y)0.64
Revenue Growth-24.50%
EPS Growth60.82%
CountryUS
Employees260
SectorTechnology
Sector Strength94
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.35
Shares Outstanding5,696,565
10 Day Avg. Volume42,030
30 Day Avg. Volume20,462
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.33
Enterprise Value/Revenue0.52
Enterprise Value/Gross Profit1.79
Enterprise Value/Ebitda-2.66
Forecast
1Y Price Target
$19.00Price Target Upside18.60% Upside
Rating ConsensusHold
Number of Analyst Covering2
Silicom Business Overview & Revenue Model
Company DescriptionSilicom 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 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: 4.43%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Silicom's earnings call presented a strong outlook with significant design wins and a robust financial position, indicating potential for substantial future growth. However, the current operating losses and increased expenses present challenges. Overall, the highlights suggest a positive long-term growth trajectory, but immediate financial pressures persist.Q2-2025 Updates
Positive Updates
Strong Design Win Momentum
Silicom achieved 5 major new Design Wins since the beginning of the year, with significant potential for future revenue growth. These Design Wins span important new and existing customers, demonstrating a robust pipeline and positioning the company for future growth.
Financial Growth and Strong Balance Sheet
Silicom reported revenue of $15 million for Q2 2025, a 4% increase compared to $14.5 million in Q2 2024. The company increased its cash and equivalents by $3 million, with a total of $116 million in working capital and marketable securities, including $80 million in cash, and maintained no debt.
Diverse Product Portfolio and Customer Relationships
New Design Wins in various product lines such as Edge systems, FPGA, Smart NICs, and high-performance NICs reflect the company's ability to cater to diverse market needs. These wins showcase Silicom’s strong customer relationships and potential for multiple revenue streams.
Optimistic Future Projections
Silicom expects double-digit revenue growth in 2026 and beyond, driven by the current pipeline and strategic design wins. The company forecasts a revenue range of $150 million to $160 million with EPS above $3.
Negative Updates
Operating Loss
Silicom reported an operating loss of $2.4 million for Q2 2025, consistent with the loss reported in Q2 2024. Net loss was $2 million, compared to $0.9 million in the previous year, with a loss per share of $0.35.
Higher Operating Expenses
Operating expenses for Q2 2025 were $7.2 million, an increase from $6.7 million in Q2 2024, attributed to the weaker U.S. dollar against the Israeli shekel and Danish krone, which are the main currencies for a large portion of Silicom's expenses.
Company Guidance
In the second quarter of 2025, Silicom achieved notable progress, reporting $15 million in revenue, with a strong Design Win momentum indicating potential for double-digit revenue growth by 2026. The company secured three significant Design Wins, including partnerships with a Fortune 500 cloud-based service provider for a $4 million annual potential, a U.S.-based edge networking provider, and a global network test equipment leader, collectively showcasing the strength and diversity of Silicom's product lines like FPGA, Smart NICs, and Edge systems. With a robust cash position of $80 million and no debt, Silicom is poised for future growth, projecting revenues between $150 million and $160 million, and an EPS of above $3. Despite a net loss of $2 million for the quarter, the company's strategic initiatives and customer relationships are expected to drive substantial shareholder value in the coming years.Silicom Financial Statement Overview
Summary
Silicom is experiencing financial challenges with declining revenue and profitability, as reflected by a negative net profit margin and EBIT margin. However, the company maintains a strong balance sheet with low leverage and effective cash flow management, providing a buffer against current financial pressures.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
16.02
Price Trends
15.57
Positive
15.02
Positive
15.25
Positive
Market Momentum
0.22
Positive
51.62
Neutral
25.09
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 16.02 is below the 20-day moving average (MA) of 16.15, above the 50-day MA of 15.57, and above the 200-day MA of 15.25, indicating a bullish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 25.09 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 | $118.23M | ― | -10.88% | ― | -2.06% | -22.58% | |
65 Neutral | $90.29M | ― | -10.16% | ― | -24.50% | 60.82% | |
63 Neutral | $130.12M | 28.09 | 111.75% | ― | -10.99% | ― | |
61 Neutral | $36.26B | 7.13 | -7.27% | 1.97% | 7.78% | -8.61% | |
54 Neutral | $55.47M | ― | -21.97% | ― | 6.84% | 49.74% | |
53 Neutral | $103.77M | ― | -4.46% | ― | -12.22% | 71.69% | |
| ― | $46.66M | ― | -4.62% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
SILC
Silicom
16.02
2.99
22.95%
KVHI
KVH Industries
5.45
0.99
22.20%
LTRX
Lantronix
2.97
-0.53
-15.14%
AIRG
Airgain
4.66
-2.86
-38.03%
INSG
Inseego
8.78
-3.16
-26.47%
FKWL
Franklin Wireless
3.96
-0.16
-3.88%
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.