EnSilica – despite the 21.46% rise today I strongly advise caution, investors should not get sucked in by excessive valuations, shares now 49.80p

Mark Watson-Mitchell – 01.10.2025

With its results due in about three weeks, it was very interesting to note today’s big rise in the share price of EnSilica (LON:ENSI) – some 21.46% ahead on the day, closing at 49.80p, on the back of some 2.3m shares traded, more than eleven times the average daily volume.

Overvaluation?

I can not explain the sudden burst of activity, other than an unusual investment rating given to the stock in a Simply Wall Street feature – reckoning that the shares were worth possibly 13 times the current price!

However much I like the potential of the company, I have to admit that I do not understand the author’s reasoning for such a mega-valuation.

In a few weeks we will get the latest statement out from the group, with the recently appointed brokership of Panmure Liberum expected to initiate its valuation of the shares and the group’s prospects – but I would guess that it would not be anywhere near a 13 times valuation.

The sudden price uplift could well tempt certain of the group’s initial shareholders to sell into such strength as quickly as they can – some 5% to 8% of the equity could be the figure of such weak holdings.

Obvious comparisons with the strong rise of shares in Filtronic (LON:FTC) could be mentioned as a driver – but I suggest holders use caution in their dealings.

The Business

The £48m-capitalised EnSilica has world-class expertise in supplying custom RF, mmWave, mixed-signal and digital ICs to its international customers spanning a number of fast-growing sectors, and it has a track record in delivering high-quality solutions to demanding industry standards.

The company, which is based near Oxford, has design centres across the UK, as well as having facilities in Bangalore, India, Hungary, and in Porto Alegre and Campinas, Brazil.   

It is a leading designer and supplier of mixed signal ASICs (Application Specific Integrated Circuits), which are the most complex chips to design and therefore of the highest value.

The group now has five chips in the supply-phase generating recurring revenues and twelve in the design-phase, which represents a significant financial milestone for the company and underpins its ongoing confidence in the business across the short and long-term.

My View

Obviously, the group is involved in one of the global go-go sectors, where orders from major space-linked groups can prove to be game-changers, but it all takes time and capital for success.

Yes - EnSilica has the time, while the capital will need to be raised with the help of new brokers Panmure Liberum.

Even though the shares are within a whisker of my late July-set 50p Target Price, I must emphasise caution, so please tread carefully and do not chase!

(Profile 02.06.25 @ 34.50p set a Target Price of 43p*)

(Profile 23.07.25 @ 39p set a Target Price of 50p)