Silicon Labs Executing On Its IoT Opportunity, With Infrastructure Likely To Get Better In 2020

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About: Silicon Laboratories Inc. (SLAB)
by: Stephen Simpson, CFA
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Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst
Summary

IoT continues to drive Silicon Labs' growth, and particularly its strong wireless portfolio, which saw better than 20% growth in the third quarter.

Infrastructure is being held back by weakness in the timing business, but the isolation business is doing well and Silicon Labs has attractive long-term opportunities in 5G and auto timing.

Silicon Labs shares still seem to be embedding a takeover premium in the valuation, as the shares have outpaced what the company's growth and margins could otherwise seem to support.

Maybe valuation does matter, at least a little. When I last wrote about Silicon Labs (SLAB) I wrote that I’d at least somewhat thrown in the towel on valuation where this stock was