Zacks_Analysts' Blog : Raising Silicom Ltd. (SILC) Top-Line Estimates Due to Broad Strength - Analyst Blog

Ken Nagy, CFA

Raising Silicom Ltd. (SILC) Top-Line Estimates Due to Broad Strength



We are raising our fourth quarter top-line estimate on SILC from $7.5 to $8.5 million. This is based on strength across all current product lines. Our bottom line estimate of $0.25 EPS will not change at this point due to currency appreciation.



Silicom Ltd. engages in the design, manufacture, marketing, and support of connectivity solutions for a range of servers and server based systems in North America, Europe, and internationally. The firm utilizes an OEM model for approximately 95% of its sales. This creates significant operating leverage through reduced sales and marketing expenses and gives the firm insight into new technologies.  The firm has several growth engines including Information Technology’s return to growth as well as SETAC, the firms new Server to Appliance Converter, which combines the best of standard servers with hardware.   



SILC seems primed to enter a new growth phase. The growth engine in the short term is three fold. The first is the growth of Server Adapters in security markets and optimization, the next growth engine is new customers as well as new product lines every quarter. The strength of the OEM business model is evident in that SILC can roll out new business and keep operating expenses in check. Lastly the evolution of 10GB server adapters should provide growth in the short term. SETAC, which enables branded high technology servers to be configured as hardware appliances, Should push Silicom’s revenues to a $100 million per year run rate.  

For the full research report, please email SCR@zacks.com.