$Silicom (SILC.US)$In the past 5 years, revenue fell sharply...

Looking at the five-year average, the current valuation is not low. Judging from the growth rate in the past two years, the valuation is very low, so the key depends on whether the source of recent growth is sustainable.

Looking at gross margin, it has basically fluctuated between 31.4% and 34.5% in the past 5 years, and operating expenses have continued to grow. Therefore, when revenue falls, operating profit falls more seriously. 2020 is due to a double decline caused by a decline in gross margin, thus reaching the lowest point in operating profit recently.

The company has no interest burden. It also has a certain amount of interest income every year. Other income items account for a very small share.

Over the past five years, the balance ratio has increased from 13.3% to 17.1%, and cash has declined year by year. Accounts receivable peaked in 2021 and fell to 031 million in 2022. The proportion is reasonable. Inventory increased by 28 million to 76 million in 2021, accounting for more than half of that year's revenue. Growth in 2022 has slowed somewhat, with an increase of 102 million to 88 million, accounting for 58% of revenue, accounting for 58% of revenue, which is still too high.

The company has no interest-bearing debt. Currently, the finances are very healthy.

The cumulative net operating amount over the past 5 years is higher than the net investment amount, and there is a certain shareholder surplus.

Overall, it appears that the fluctuation in the company's profit is caused by a rigid increase in expenses. As long as revenue can continue to grow, this part of the impact can be overcome.

The current price-earnings ratio is 14.1, so you can choose carefully (⭐️)