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Silicon Motion (SIMO)
:SIMO
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Silicon Motion
(NASDAQ:SIMO)
72Outperform
Positive Factors
Market Diversification
Management supports the diversification story, with a significant portion of revenue expected from Enterprise and Automotive sectors.
Product Development
Core business share gains are expected to continue, driven by new product wins at Flash and Module maker customers.
Negative Factors
Consumer Demand
Guidance disappointed due to muted holiday consumer demand in PCs, handsets, and aftermarket SSDs.
Revenue Forecast
Revenue estimates for 2025 have been reduced by approximately $30 million due to a weak first half.
Silicon Motion (SIMO) vs. S&P 500 (SPY)
Market Cap
$1.86B
Dividend Yield3.57%
Average Volume (3M)456.17K
Price to Earnings (P/E)20.7
Beta (1Y)1.22
Revenue Growth25.18%
EPS Growth69.11%
CountryUS
Employees1,546
SectorTechnology
Sector Strength51
IndustrySemiconductors
Share Statistics
EPS (TTM)2.69
Shares Outstanding33,681,620
10 Day Avg. Volume477,963
30 Day Avg. Volume456,165
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)2.94
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$72.50Price Target Upside28.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Silicon Motion Business Overview & Revenue Model
Company DescriptionSilicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the Ferri SSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, South Korea, China, Malaysia, Singapore, and internationally. Silicon Motion Technology Corporation was founded in 1995 and is based in Hong Kong, Hong Kong.
How the Company Makes MoneySilicon Motion makes money through the sale of its semiconductor solutions, primarily NAND flash controllers and SSD solutions. The company's revenue model is driven by the production and distribution of these controllers to SSD manufacturers, module makers, and device manufacturers. Key revenue streams include sales of controllers for client SSDs, eMMC, UFS controllers for smartphones, and industrial embedded NAND controllers. Additionally, Silicon Motion capitalizes on its partnerships with major NAND flash manufacturers and device OEMs, leveraging these relationships to integrate its technology into a wide range of storage products. The company's ability to innovate and deliver high-performance, cost-effective solutions also plays a significant role in maintaining its competitive position and driving its financial performance.
Silicon Motion Financial Statement Overview
Summary
Silicon Motion exhibits strong revenue growth and operational efficiency with a solid balance sheet. Despite a decline in free cash flow, the company's financial health remains robust due to zero debt and substantial cash reserves. The stability in profitability and healthy margins position the company well within the semiconductor industry, though improvements in cash flow generation would enhance its financial standing.Income Statement
Silicon Motion has demonstrated solid revenue growth with a significant increase from $639 million in 2023 to $803 million in 2024. The gross profit margin improved to 46.1%, indicating effective cost management. However, net profit margin remained relatively stable at around 11.3%, suggesting room for improvement in profitability. EBIT and EBITDA margins are healthy, at 11.5% and 14.9% respectively, showing good operational efficiency.75
Positive
Balance Sheet
The company maintains a strong balance sheet with zero debt as of 2024, reducing financial risk. The equity ratio is high, at approximately 75%, indicating a strong capital structure. Return on equity is solid at 11.7%, reflecting efficient use of equity capital. The company’s liquidity position remains robust with significant cash reserves.80
Positive
Cash Flow
Free cash flow experienced a decline from $98.8 million in 2023 to $32.7 million in 2024, raising concerns about cash generation. However, operating cash flow remains positive, indicating the company’s ability to generate cash from operations. The operating cash flow to net income ratio is stable, reflecting consistent cash generation relative to profits.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 803.55M | 639.14M | 945.92M | 922.10M | 539.52M | Gross Profit |
| 370.90M | 270.39M | 465.83M | 460.80M | 260.16M | EBIT |
| 92.81M | 39.88M | 213.93M | 245.87M | 115.13M | EBITDA |
| 119.60M | 83.04M | 233.25M | 263.03M | 99.33M | Net Income Common Stockholders |
| 90.72M | 52.87M | 172.51M | 200.00M | 79.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 276.07M | 314.30M | 232.18M | 360.08M | 342.96M | Total Assets |
| 1.03B | 1.01B | 961.25M | 971.33M | 742.06M | Total Debt |
| 0.00 | 2.34M | 3.20M | 2.90M | 3.06M | Net Debt |
| -276.07M | -311.96M | -228.97M | -357.18M | -339.90M | Total Liabilities |
| 259.12M | 273.26M | 228.65M | 313.75M | 184.32M | Stockholders Equity |
| 773.75M | 734.70M | 732.60M | 657.58M | 557.74M |
| Cash Flow | Free Cash Flow | |||
| 32.74M | 98.77M | 50.97M | 150.04M | 97.11M | Operating Cash Flow |
| 77.19M | 149.08M | 83.75M | 176.87M | 115.89M | Investing Cash Flow |
| -44.19M | -49.09M | -32.78M | -30.34M | -20.78M | Financing Cash Flow |
| -67.25M | -16.69M | -183.10M | -99.73M | -73.91M |
Silicon Motion Technical Analysis
Positive
56.50
Price Trends
53.91
Positive
54.16
Positive
59.93
Negative
Market Momentum
0.24
Negative
56.62
Neutral
84.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SIMO, the sentiment is Positive. The current price of 56.5 is above the 20-day moving average (MA) of 54.24, above the 50-day MA of 53.91, and below the 200-day MA of 59.93, indicating a neutral trend. The MACD of 0.24 indicates Negative momentum. The RSI at 56.62 is Neutral, neither overbought nor oversold. The STOCH value of 84.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SIMO.
Silicon Motion Risk Analysis
Silicon Motion disclosed 37 risk factors in its most recent earnings report. Silicon Motion reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Silicon Motion Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.86B | 20.73 | 12.01% | 3.57% | 25.18% | 69.11% | |
71 Outperform | $105.32B | 65.18 | 4.43% | 1.80% | -19.28% | -44.00% | |
68 Neutral | $27.82B | 91.20 | 4.71% | 3.51% | -44.31% | -86.74% | |
67 Neutral | $19.25B | 12.57 | 18.97% | ― | -14.19% | -27.42% | |
65 Neutral | $162.88B | 34.45 | 28.25% | 2.97% | -10.72% | -26.60% | |
62 Neutral | $60.96B | ― | -6.26% | 0.34% | 4.71% | 5.57% | |
58 Neutral | $22.11B | 10.47 | -17.86% | 2.40% | 4.75% | -24.81% |
* Technology Sector Average
Performance Comparison
SIMO
Silicon Motion
56.50
-16.75
-22.87%
ADI
Analog Devices
212.34
26.47
14.24%
MRVL
Marvell
72.76
4.70
6.91%
MCHP
Microchip
53.89
-30.26
-35.96%
ON
ON Semiconductor
45.68
-27.21
-37.33%
TXN
Texas Instruments
185.51
22.17
13.57%
Silicon Motion Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 0.71% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlights significant achievements in revenue growth, margin improvements, and market expansion, particularly in enterprise SSDs and automotive sectors. However, these positives are balanced by challenges such as weak consumer demand, declining NAND prices, and economic uncertainty impacting short-term revenue. While long-term growth prospects are promising, short-term challenges persist.Highlights
Significant Revenue Growth
Silicon Motion Technology Corporation achieved over 25% revenue growth year-over-year, outperforming the end market it serves.
Improved Gross and Operating Margins
Gross margin improved from 43% to over 46%, and operating margin increased to 15.3%, up from 11.9% in 2023.
New Market Entry and Expansion
The company entered the enterprise SSD market with six customers and began shipments of the Mount Titan product. Automotive business grew to over 5% of sales.
Product Innovations and Wins
Introduced PCIe 5 SSD controller, secured design wins with four NAND makers and several module makers. UFS and eMMC controller business grew by approximately 70% in 2024.
Strong Position in Automotive Market
Achieved ASPICE level 3 certification for PCIe 4.0 controller, securing a lead over competitors and shipping to major tier-one automotive customers.
Lowlights
Weak Consumer Market
Faced weak end-user demand for PCs and smartphones, leading to an unseasonably weak holiday season.
NAND Pricing Decline
Consumer-grade NAND pricing continued to decline due to weak consumer demand and global economic uncertainty.
Short-term Revenue Decline
Fourth quarter sales decreased by 10% sequentially, and first-quarter revenues are expected to decline by 12.5% to 17.5%.
Ongoing Economic Uncertainty
Global economic uncertainty, potential tariffs, and other challenges are limiting near-term demand, growth, and visibility.
Company Guidance
During the Silicon Motion Technology Corporation's Q4 2024 earnings call, the company reported a 25% year-over-year revenue growth, surpassing expectations in the semiconductor industry. Gross margins increased from 43% to over 46%, and operating margins improved from 11.9% in 2023 to 15.3% in 2024. They highlighted significant advancements in enterprise SSD and automotive segments, contributing to over 5% of sales. The company anticipates exiting 2025 with an annual revenue run rate close to $1 billion, driven by their PCIe Gen 5 and UFS 4.1 solutions. Looking forward to 2027, Silicon Motion expects 20% of their business to come from new opportunities, including enterprise and automotive markets, reflecting their strategic diversification beyond the maturing PC and smartphone markets.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.