Needham Downgrades Silicom Ltd. (SILC) to Hold

Needham analyst Alex Henderson downgraded Silicom Ltd. (NASDAQ: SILC) from Buy to Hold.

The analyst comments "Silicom had a soft CY2Q24 and lowered its already weak outlook, stretching the timeline for recovery. SILC now expects 2HCY24 to be below a deeply depressed 1HCY24 and only a slight recovery in a still-depressed CY25. We believe Balance Sheet strength is supporting the stock, but that performance is so poor and the outlook is so stretched that we can no longer recommend the shares. Silicom sports $22.90/sh in Cash, Receivables, and Inventory and ~$2.30/sh in Current Liabilities. We estimate the Cash burn to Profitability at $21-$23 million, equating to $3.55-$3.85/sh. This puts Silicom Net Asset Value minus Current Liabilities of ~$17.00/sh. Adjusting for the Cash burn to get to profitability yields a value of ~$17.85/sh. However, Silicom's guidance doesn't call for growth before CY26, making share returns challenging, we believe."

For an analyst ratings summary and ratings history on Silicom Ltd. click here. For more ratings news on Silicom Ltd. click here.

Shares of Silicom Ltd. closed at $13.59 yesterday.

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