Silicon Motion (SIMO) AI Stock Analysis

• Market Cap: $2.60B
• Dividend Yield: 2.65%
• Average Volume (3M): 348.52K
• Price to Earnings (P/E): 32.1
• Beta (1Y): 1.58
• Revenue Growth: -0.29%
• EPS Growth: 1.47%
• Country: US
• Employees: 1,819
• Sector: Technology
• Sector Strength: 98
• Industry: Semiconductors
• EPS (TTM): 0.69
• Shares Outstanding: 33,983,670
• 10 Day Avg. Volume: 470,828
• 30 Day Avg. Volume: 348,525
• PEG Ratio: -0.35
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 2.26
• P/FCF Ratio: 55.53
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 3.00
• Enterprise Value/Gross Profit: 6.37
• Enterprise Value/Ebitda: 22.49
• 1Y Price Target: $95.00
• Price Target Upside: 26.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: ―

Silicon Motion demonstrates robust financial performance with strong revenue growth and a solid balance sheet, although the decline in free cash flow is a concern. Technical indicators suggest mixed momentum, while the valuation offers a balanced view of growth and income. The company's strategic wins and product demand outlook, as reflected in the earnings call, support a positive long-term view, although immediate challenges remain.

Positive Factors

Market Position

Mobile share gains with new technologies are expected to enhance the company's market position.

Product Development

Expectations for PCIe Gen5 8CH to lead growth are bolstered by broad PC OEM wins and increasing demand from Chinese AI startups.

Revenue Growth

Revenue estimates increase across all major segments.

Negative Factors

Earnings Risk

There are continued concerns about SIMO’s low exposure to enterprise solutions and potential earnings miss due to weaker smartphone and PC demand.

Profitability

Operating profit margin was below consensus expectations, indicating pressure on profitability.

Tariff Impact

Assumptions indicate potential risk related to US tariff-related demand, impacting sales projections.

Silicon Motion Business Overview & Revenue Model

Company Description

Silicon 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 Money

Silicon 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. The company has zero debt and substantial cash reserves, enhancing financial stability. However, the decline in free cash flow is a concern, suggesting a need for improved cash generation.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	772.09M	803.55M	639.14M	945.92M	922.10M	539.52M
Gross Profit	363.61M	370.90M	270.39M	465.83M	460.80M	260.16M
EBITDA	102.93M	119.60M	83.04M	233.25M	263.03M	99.33M
Net Income	80.03M	90.72M	52.87M	172.51M	200.00M	79.75M
Balance Sheet
Total Assets	1.03B	1.03B	1.01B	961.25M	971.33M	742.06M
Cash, Cash Equivalents and Short-Term Investments	208.03M	276.07M	314.30M	232.18M	360.08M	342.96M
Total Debt	0.00	0.00	2.34M	3.20M	2.90M	3.06M
Total Liabilities	244.80M	259.12M	273.26M	228.65M	313.75M	184.32M
Stockholders Equity	788.88M	773.75M	734.70M	732.60M	657.58M	557.74M
Cash Flow
Free Cash Flow	30.35M	32.74M	98.77M	50.97M	150.04M	97.11M
Operating Cash Flow	81.07M	77.19M	149.08M	83.75M	176.87M	115.89M
Investing Cash Flow	-50.44M	-44.19M	-49.09M	-32.78M	-30.34M	-20.78M
Financing Cash Flow	-92.17M	-67.25M	-16.69M	-183.10M	-99.73M	-73.91M

Silicon Motion Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 75.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 75.04 is above the 20-day moving average (MA) of 74.19, above the 50-day MA of 71.54, and above the 200-day MA of 57.18, indicating a bullish trend. The MACD of 1.29 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 18.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SIMO.

Silicon Motion Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	78 Outperform	$2.50B	16.24	16.19%	―	-19.38%	-33.03%
VECO	76 Outperform	$1.42B	23.29	7.83%	―	-0.19%	-28.72%
ACMR	75 Outperform	$1.53B	14.52	12.32%	―	17.53%	27.74%
PLAB	74 Outperform	$1.19B	10.32	11.23%	―	-3.19%	-11.06%
SIMO	70 Outperform	$2.60B	32.15	10.16%	2.65%	-0.29%	1.47%
HIMX	63 Neutral	$1.27B	16.96	8.64%	5.13%	-2.16%	-2.77%
Sector *	61 Neutral	$35.87B	6.13	-9.30%	2.06%	7.63%	-6.38%