Why Silicom Shares Plunged

By Evan Niu, CFA – Jul 23, 2013 at 4:21PM

NASDAQ: SILC

Silicom

Market Cap

$102M

Today's Change

(0.86%) $0.13

Current Price

$15.29

Price as of April 18, 2024, 3:58 p.m. ET

Is this meaningful, or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Silicom (SILC 0.86%) plunged today by as much as 12% after the company reported earnings.

So what: Revenue in the quarter added up to $15.7 million, with non-GAAP earnings per share of $0.48. Both figures topped consensus estimates of $15.5 million in sales and $0.40 per share in adjusted profit, but still weren't enough for investors.

Now what: The company said it scored two major deals, one with an existing customer and another with a new customer. The deals weren't enough to impress investors, though. Maxim Group downgraded its rating on Silicom from "buy" to "hold" following the results, but it was defended at Zacks.

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Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.