SLAB
Silicon Laboratories Inc.
$220.58
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 36179.6% above fair value
You pay
$220.58
Bear
$0.46
Fair
$0.61
Bull
$0.76
Bear
$0.46
-99.8%
$0.04 × 12x
Fair
$0.61
-99.7%
$0.04 × 16x
Bull
$0.76
-99.7%
$0.04 × 20x
Adjust Assumptions
16.0x
0.04$
Key Value Driver
Through-cycle normalized EPS ($0.04)
Implied Market Multiple
5804.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$183.40
Divergence from AlphaVal
100%
Summary
Using 7-year normalized EPS of $0.04 at a 16x cycle multiple, the base-case value is $0.61 per share. P/TBV cross-check: 10.5x.
Warnings
Price-to-book value of 10.5x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $183.40 (from 38 analysts). Our estimate is 100% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing