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what it is
Silicon Labs makes chips that help everyday devices sense, connect, and talk to each other with less power.
how it gets paid
Last year Silicon Lab made $785M in revenue. bluetooth products was the main engine at $255M, or 32% of sales.
why it's growing
Revenue grew 34.3% last year. The 56.4% gross margin matters most because it shows the chips still carry pricing power even while the broader income statement is rebuilding.
what just happened
The latest quarter was a tiny beat, with EPS of $0.57 versus a $0.55 estimate.
At a glance
B balance sheet — gets the job done, barely
5/100 earnings predictability — expect surprises
221.1x trailing p/e — you're paying up for this one
15.0% return on capital — nothing to write home about
$3.80 fy2027 eps est
xvary composite: 47/100 — below average
What they do
Silicon Labs makes chips that help everyday devices sense, connect, and talk to each other with less power.
These chips solve a boring, expensive problem. Mixed-signal ICs (chips that turn real-world signals into usable data) cut customer power use, size, and cost, which is why design wins tend to stick. You are not betting on hype here. You are betting that a company with $785 million in annual revenue and 56.4% gross margin keeps getting chosen inside products people do not redesign lightly.
How they make money
$785M
annual revenue · their business grew +34.3% last year
bluetooth products
$255M
multiprotocol products
$196M
wi-fi products
$141M
proprietary wireless products
$118M
software, tools, and other
$75M
The products that matter
low-power connectivity chips
iot and industrial semiconductors
$785M revenue
it is the full $785M business Texas Instruments agreed to buy, which means every product discussion now feeds into one bigger question: is the asset worth $231 a share in cash to the acquirer.
the whole business
Key numbers
$1.0B
2027 sales est
Revenue is projected to rise from $785 million to $1.0 billion by 2027, or about 27%. Plain English: the business needs real growth, not just takeover math.
221.1x
trailing p/e
P/E (price-to-earnings ratio → how many dollars investors pay for $1 of profit → so what) is 221.1x. You are paying tomorrow's price for yesterday's earnings.
9.0%
operating margin
Operating margin (profit after running the business → core profitability → so what) is still negative. The company is recovering, not cruising.
56.4%
gross margin
Gross margin (sales left after production costs → pricing power → so what) is 56.4%. The products have value. The issue is getting operating costs under control.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- net profit margin 14.4% — keeps 14 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SLAB 3 years ago → it's now worth $11,820.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
The latest quarter was a tiny beat, with EPS of $0.57 versus a $0.55 estimate.
Revenue hit $577 million, up 180% vs. prior year, while gross margin came in at 56.4%. Deadpan fact bomb: a company with trailing EPS of -$1.2 now has a forward EPS estimate of $5.0.
$577M
revenue
$0.57
eps
56.4%
gross margin
the number that mattered
The 56.4% gross margin matters most because it shows the chips still carry pricing power even while the broader income statement is rebuilding.
-
silicon labs will be acquired by texas instruments.
-
on the news of a buyout, the stock price rallied roughly 50%.
-
all shares of slab will be bought for $7.5 billion in all cash, funded through incremental debt.
-
this is an offer of $231 per outstanding share of slab.the deal is expected to close in the first half of 2027, pending regulatory and shareholder approval.
-
the company closed out 2025 with solid financial results.
source: company earnings report, 2026
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What could go wrong
the #1 risk is antitrust or shareholder trouble that blocks the Texas Instruments buyout.
med
the $231 cash bid could disappear
The stock sits about 14% below the offer because the market is pricing the chance that the transaction does not close.
If the deal breaks, the market stops valuing SLAB as a signed cash acquisition and starts valuing it as a standalone chip company again.
med
a long wait can shrink the payoff
Management expects closing in the first half of 2027. The longer that drags, the less attractive the annualized return on the spread becomes.
You are not just betting on the deal price. You are betting on the clock.
med
the business still has to behave while everyone waits
The latest quarter showed -$0.30 EPS and a -8.3% margin. That does not kill a signed deal by itself, but it reminds you this is not a pristine asset gliding into close.
A weaker operating backdrop raises the cost of any delay and makes the downside uglier if the deal terms ever wobble.
You are being paid roughly $27.58 a share to wait, but you are also underwriting a break scenario that could pull the stock back toward standalone valuation levels closer to the $174 legacy midpoint than the $231 cash bid.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
first-half 2027 is the date that matters
If the closing timeline stays on track, the spread is easier to justify. If it slips, your annualized return starts leaking out.
risk
regulatory and shareholder approvals
A cash deal is only cash when the signatures clear. Any friction here is market-moving for SLAB.
trend
the spread between $203.42 and $231
A tightening spread usually signals rising confidence in close. A widening spread means the market smells trouble.
metric
whether the standalone numbers keep wobbling
Latest quarter: $206M revenue, -$0.30 EPS, and a -8.3% margin. The deal dominates, but messy fundamentals still matter while you wait.
Analyst rankings
risk profile
average
stability score 3 — roughly middle-of-the-pack risk. not a bunker stock, not a disaster either.
earnings predictability
5 / 100
in human-speak, analysts do not trust this earnings stream to behave neatly quarter after quarter.
standalone valuation
$174 midpoint
Before you anchor on $231, remember the legacy 3–5 year midpoint target sat at $174. The deal added value the old targets were not seeing.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 107 buyers vs. 107 sellers in 4q2025. total institutional holdings: 33.0M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$70
$278
$203
current price
$174
target midpoint · 14% from current · 3-5yr high: $240 (+20% · 5% ann'l return)
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