The 3.8% return this week takes Silicon Laboratories' (NASDAQ:SLAB) shareholders five-year gains to 29%

If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the Silicon Laboratories Inc. (NASDAQ:SLAB) share price is up 29% in the last five years, that's less than the market return. Unfortunately the share price is down 7.7% in the last year.

The past week has proven to be lucrative for Silicon Laboratories investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Silicon Laboratories

Given that Silicon Laboratories didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

For the last half decade, Silicon Laboratories can boast revenue growth at a rate of 5.9% per year. That's not a very high growth rate considering the bottom line. It's probably fair to say that the modest growth is reflected in the modest share price gain of 5% per year. If profitability is likely in the near term, then this might be one to add to your watchlist.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Silicon Laboratories is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

A Different Perspective

While the broader market gained around 28% in the last year, Silicon Laboratories shareholders lost 7.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Silicon Laboratories it might be wise to click here to see if insiders have been buying or selling shares.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.