12:37 PM EST, 11/05/2024 (MT Newswires) -- Silicon Laboratories ( SLAB ) revenue recovery from Q4 2023 lows has been slower than expected, and while next year's outlook is positive, the stock remains expensive, Morgan Stanley said in a note Tuesday.

The demand for the company's products is recovering slower than expected, with only modest improvements in orders and no signs of speeding up, the investment firm said.

In the most recent quarter, the company's revenue matched estimates at $166 million, but its profit margins missed expectations, Morgan Stanley said.

Following the company's lowered Q4 guidance, Morgan Stanley adjusted forecasts, expecting revenues to decline 25% in 2024 and grow 38% in 2025, with a slower recovery in margins and lower EPS estimates.

While the company promises long-term growth potential in the Internet of Things market, rebuilding confidence will take time, Morgan Stanley added.

Morgan Stanley cut its price target for Silicon Laboratories ( SLAB ) to $97 from $123, but maintained an equal-weight rating.

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