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Should You Think About Buying Silicon Laboratories Inc. (NASDAQ:SLAB) Now?

editorial-team@simplywallst.com (Simply Wall St)
·3 min read

While Silicon Laboratories Inc. (NASDAQ:SLAB) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$142 and falling to the lows of US$109. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Silicon Laboratories' current trading price of US$118 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Silicon Laboratories’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Silicon Laboratories

What Is Silicon Laboratories Worth?

Good news, investors! Silicon Laboratories is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $157.14, but it is currently trading at US$118 on the share market, meaning that there is still an opportunity to buy now. However, given that Silicon Laboratories’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Silicon Laboratories generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Silicon Laboratories' earnings growth are expected to be in the teens in the upcoming year, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since SLAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SLAB for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SLAB. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Silicon Laboratories, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com