Despite the negative earnings momentum, shares of Silicon Labs still trade at a premium valuation. Investors may want to wait for earnings momentum to turn around before establishing a long position.Silicon Labs develops analog-intensive, mixed-signal integrated circuits used in a wide range of applications such as set-top boxes, televisions, and cell phones. The company was founded in 1996 and has a market cap of $1.7 billion.Soft Q2 Results, Weak GuidanceSilicon Labs reported its second quarter results on July 25. Adjusted earnings per share came in at 33 cents, missing the Zacks Consensus Estimate by 3 cents.Revenues declined 3% from the previous quarter to $141.5 million, which was also below the consensus at $143.0 million. This decrease was driven by steep declines in some of the company's legacy products.Following the soft Q2 results, management guided Q3 EPS significantly below the consensus at the time. This prompted analysts to revise their estimates significantly lower for both 2013 and 2014, sending the stock to a Zacks Rank #5 (Strong Sell).The Zacks Consensus Estimate for 2013 is now $1.46, down from $1.73 just 30 days ago. The 2014 consensus is currently $1.65, down from $1.94 over the same period.You can see the big drop in consensus estimates in the following chart:ValuationShares of Silicon Labs are down more than -12% since the Q2 earnings release. Despite this, the stock doesn't look like a value here. Shares currently trade around 25x 12-month forward earnings, which is a premium to the industry median 16x. Its price to cash flow ratio of 19 is also above the industry median of 14x.The Bottom LineWith falling earnings estimates and premium valuation, investors should consider avoiding this Zacks Rank #5 (Strong Sell) stock until its earnings momentum turns around.Investors still interested in the 'Semiconductor - Analog & Mixed' industry may want to take a look at Microchip Technology (MCHP), which carries a Zacks Rank of 1 (Strong Buy) and trades at 19x forward earnings, or Analog Devices (ADI), which has a Zacks Rank of 2 (Buy) and trades at 20x.Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.Estimates have been falling for Silicon Labs (SLAB) after the company reported soft second quarter results and provided weak third quarter guidance. It is a Zacks Rank #5 (Strong Sell) stock.