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Silicon Motion (SIMO)
NASDAQ:SIMO
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Silicon Motion
(NASDAQ:SIMO)
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Rating:73Outperform
Price Target:
$143.00
▲(11.40% Upside)
The score is driven primarily by strong financial strength (notably the near-zero-debt balance sheet) and improving operating performance, plus bullish technical momentum. These positives are tempered by weak recent free-cash-flow consistency, a relatively high P/E valuation, and guidance that includes near-term margin and expense pressures despite an upbeat 2026 growth outlook.
Positive Factors
Conservative Balance Sheet
Near-zero debt and steadily growing equity provide durable financial flexibility to fund R&D/tapeouts, support working capital during NAND cycles, and maintain dividend capacity. This reduces refinancing and leverage risk and preserves optionality through 2026 product ramps.
Recovery and Revenue Momentum
A multi-quarter revenue rebound (strong 2024 recovery and continued 2025 growth) shows the business can regain volume and market share across cycles. Consistent top-line improvement supports operating leverage and underpins sustainable margin recovery as new products scale through 2026.
Product Diversification and Design Wins
Design wins across client PCIe5, MonTitan enterprise, boot drives and automotive (Ferri) create multiple durable end-market growth engines. Diversification into enterprise, boot/DPU and automotive reduces pure-PC cyclicality and supports higher ASPs and longer product lifecycles over 2–3 years.
Negative Factors
Inconsistent Cash Generation
Free-cash-flow volatility and a near-breakeven FCF in 2025 weaken confidence in internally funding capex, tapeouts, and dividends without drawing on cash reserves. Persistent weak cash conversion versus net income raises risk to capital returns and reduces margin of safety during downturns.
Dependence on NAND/DRAM Allocation
Scaling client, boot-drive and automotive programs depends on memory supplier allocations. If NAND/DRAM is prioritized for AI or hyperscaler customers, Silicon Motion may face constrained shipments or higher input costs, limiting revenue scaling and creating persistent margin variability.
Rising R&D / Tapeout Costs
Planned 4nm tapeouts and elevated R&D/tapeout spend are structurally necessary but will increase operating expenses and compress near-term operating margins. Sustained higher OpEx through 2026 could pressure free cash flow and require continued execution to realize long-term ASP and share gains.
Silicon Motion (SIMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.36B
Dividend Yield2.22%
Average Volume (3M)652.54K
Price to Earnings (P/E)33.0
Beta (1Y)1.94
Revenue Growth-2.26%
EPS Growth9.74%
CountryUS
Employees1,819
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.26
Shares Outstanding33,983,670
10 Day Avg. Volume762,920
30 Day Avg. Volume652,536
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)1.27
Price to Sales (P/S)5.30
P/FCF Ratio-971.73
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue4.56
Enterprise Value/Gross Profit9.44
Enterprise Value/Ebitda32.75
Forecast
1Y Price Target
$154.40Price Target Upside20.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through the sale of its NAND flash memory controllers and related products. The company has a diversified revenue model, with key revenue streams coming from the sale of SSD controllers, mobile storage solutions, and other semiconductor products. Significant partnerships with leading memory manufacturers and OEMs (original equipment manufacturers) enhance its market presence and drive sales. Additionally, Silicon Motion benefits from the growing demand for high-performance storage solutions across various sectors, including consumer electronics, enterprise data centers, and industrial applications, contributing to its overall earnings.
Silicon Motion Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: significant Q4 revenue and margin outperformance, multiple product wins (PCIe 5 client SSD, MonTitan enterprise controllers, boot drive shipments), and a confident outlook for sequential quarterly growth and a record 2026. Offsetting these positives are notable risks from industry-wide NAND and DRAM supply tightness, near-term margin pressure from mix and NAND pass-through obligations, elevated R&D and tapeout costs, and expected PC unit softness. On balance, the company presented more substantial and tangible positives (revenue beats, product ramps, design wins, clear market diversification) than negatives, while acknowledging supply-driven constraints that management believes it can mitigate through partnerships and selective program engagement.Q4-2025 Updates
Positive Updates
Strong Q4 Revenue and Double-Digit Growth
Revenue of $278.5M in Q4 2025, up 15% sequentially and over 45% year-over-year; performance beat the high end of guidance and surpassed the $1.0B run-rate target set at the start of the year.
Healthy Profitability Metrics
Non-GAAP gross margin of 49.2% (at the higher end of guidance) and non-GAAP operating margin of 19.3% in Q4 2025; diluted earnings per ADS of $1.26 for the quarter.
Positive Near-Term Guidance with Sequential Growth
Q1 2026 revenue guide of $292M to $306M (implying +5% to +10% sequential growth), with operating margin guidance of 16% to 18%; company expects sequential revenue growth every quarter in 2026.
eMMC / UFS Business Outperformance
eMMC and UFS revenue grew 25% for full-year 2025; company expects continued outperformance in 2026 as NAND makers shift away from mobile and module makers capture share—mobile/eMMC UFS expected to represent a material portion of revenue (management cited ~35%–40% scale for mobile/eMMC UFS contribution).
Client SSD Momentum and PCIe 5 Adoption
Successful introduction of 8-channel PCIe 5 controller and new DRAM-less 4-channel PCIe 5 controller; management targets client PC market share growth from ~30% today toward ~40% over the next few years and expects higher ASPs and profitability from PCIe 5 transitions.
Enterprise (MonTitan) Traction and Design Wins
MonTitan enterprise controller qualifiers began in Dec quarter for TLC high-performance compute SSDs with commercial ramp targeted in H2 2026; management expects MonTitan to represent ~5%–10% of revenue exiting 2026 and has secured design wins with multiple Tier-1 customers for a 4nm PCIe 6 controller planned to ramp in 2027–2028.
Boot Drive / DPU Volume Shipments and Early Revenue
Began volume shipments of enterprise boot drive to a leading AI GPU maker for current DPU product; management cites initial 2026 revenue for this line roughly around $50M (management estimate) with next‑gen DPU and switch programs expected to contribute in H2 2026 and grow in 2027.
Automotive (Ferri) and Portfolio Diversification
Ferri automotive/industrial storage demand described as strong in the tight NAND environment; management expects automotive to ramp to about 10% of total revenue by the end of 2026, supporting diversification away from consumer-only exposure.
Solid Cash Position and Operational Improvements
Cash, cash equivalents and restricted cash of $277.1M at quarter end (up from $272.4M prior quarter); company continues to invest in R&D and product tapeouts while increasing inventories to support anticipated ramps.
Negative Updates
NAND and DRAM Supply Constraints and Price Volatility
Management highlighted broad supply tightness and rapid price increases for NAND and DRAM, with hyperscalers and AI customers attempting to lock up supply through 2026; this creates allocation risk and intra-quarter price increases that pressure many end markets.
Gross Margin Pressure in Early 2026 From Mix and NAND Pass-Through
Q1 2026 gross margin guidance of 46%–47% (down from 49.2% in Q4) reflecting mix shift toward mobile/eMMC (below corporate average) and the potential margin impact from procuring NAND for boot drive/solution offerings where pass-through negotiations are required.
PC Unit Market Weakness and Despecing
Industry and management view PC unit shipments declining ~5%–10% in 2026; price-driven despecing and component shortages may reduce value-line shipments, creating a tougher near-term market for client SSD volumes despite share gains and ASP uplift from PCIe 5.
Rising Operating Expenses for Growth Initiatives
Operating expenses increased to $83.2M in Q4 driven by investments in AI/enterprise/boot drive; additional tapeout and development costs (including a 4nm tapeout) are expected to further raise OpEx in Q2–Q3 2026.
Margin and Supply Uncertainty for Boot Drive Programs
Boot drive/BlueField solutions require the company to procure NAND at market prices and negotiate cost pass-throughs to customers; management noted case-by-case margin trade-offs and the potential need to forgo some business if pricing or margin targets are not met.
Dependence on NAND Maker Allocation Decisions
Despite long-standing partnerships, management acknowledged that some NAND suppliers' allocations are not secure and that memory makers are prioritizing DRAM/HBM for AI, which could limit Silicon Motion's ability to fully scale certain programs unless supply access is secured.
Company Guidance
Silicon Motion guided that Q1 2026 revenue should rise 5%–10% sequentially to $292–$306 million (they expect Q1 to be the low point for 2026 and sequential growth each quarter thereafter), with gross margin slightly down to 46%–47% in the March quarter (recovering to a 48%–50% target range later in the year) and operating margin of 16%–18%; they expect an effective tax rate of 19% and stock‑based compensation/dispute expenses of $10.8–$11.8 million in Q1, while warning that additional tapeout/development costs (including a planned 4 nm tapeout in Q2) will raise operating expenses in Q2–Q3 even as full‑year 2026 operating margin should improve versus 2025. For context, Q4 2025 actuals were revenue $278.5M (+15% sequential, +45% YoY), gross margin 49.2%, operating expenses $83.2M, operating margin 19.3%, EPS $1.26, stock comp $15.8M, cash $277.1M and dividend outflows of $16.7M; management reiterated 2026 should be a record revenue year, expects MonTitan to reach roughly 5%–10% of revenue exiting 2026 (boot drives excluded) and automotive to be ~10% of revenue by year‑end.Silicon Motion Financial Statement Overview
Summary
Strong earnings rebound in 2024–2025 and an exceptionally conservative balance sheet with near-zero debt support a solid financial profile. The main offset is weak and volatile recent free cash flow, with FCF nearly breakeven in 2025 and cash conversion trailing net income.Income Statement
Revenue rebounded strongly in 2024 (+25.7%) and continued in 2025 (+10.9%), recovering from the sharp 2023 decline (-32.4%). Profitability remains solid with healthy 2024 margins (gross ~45.9%, net ~11.1%), and earnings improved meaningfully from 2023 to 2025 (net income: ~$52.9M → ~$122.6M). The main weakness is volatility versus the 2021–2022 peak, where margins and absolute profits were materially higher, indicating cyclical end-market exposure.78
Positive
Balance Sheet
The balance sheet is exceptionally conservative with near-zero debt across the period (debt-to-equity ~0.3%–0.5% in 2020–2024 and zero reported debt in 2025), providing strong financial flexibility. Equity has steadily grown (about $558M in 2020 to $831M in 2025), supporting a larger asset base. Return on equity has moderated from very high levels in 2021–2022 (~30% to ~23.5%) to mid-teens/low-teens more recently (2024 ~11.5%), reflecting softer profitability versus prior peaks, but leverage risk remains minimal.90
Very Positive
Cash Flow
Cash generation has been inconsistent. Operating cash flow and free cash flow were strong in 2023 (FCF ~$98.8M) but fell sharply in 2024 (FCF ~$32.7M) and nearly breakeven in 2025 (FCF ~$6.3M), with a steep negative 2025 free-cash-flow growth rate. Cash conversion also weakened in 2024, with free cash flow running well below net income (about 42%), suggesting working-capital or spending pressure. Positively, the company has demonstrated the ability to generate strong cash in better demand environments, but recent volatility lowers confidence in near-term cash consistency.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 885.63M | 803.55M | 639.14M | 945.92M | 922.10M |
| Gross Profit | 427.51M | 368.76M | 270.39M | 465.83M | 460.80M |
| EBITDA | 123.21M | 132.74M | 83.04M | 231.57M | 264.46M |
| Net Income | 122.64M | 89.25M | 52.87M | 172.51M | 200.00M |
Balance Sheet | |||||
| Total Assets | 1.22B | 1.03B | 1.01B | 961.25M | 971.33M |
| Cash, Cash Equivalents and Short-Term Investments | 201.84M | 276.07M | 314.30M | 232.18M | 360.08M |
| Total Debt | 0.00 | 2.53M | 2.34M | 3.20M | 2.90M |
| Total Liabilities | 390.27M | 259.12M | 273.26M | 228.65M | 313.75M |
| Stockholders Equity | 830.74M | 773.75M | 734.70M | 732.60M | 657.58M |
Cash Flow | |||||
| Free Cash Flow | 6.28M | 32.74M | 98.77M | 50.97M | 150.04M |
| Operating Cash Flow | 61.43M | 77.19M | 149.08M | 83.75M | 176.87M |
| Investing Cash Flow | -27.47M | -44.19M | -49.09M | -32.78M | -30.34M |
| Financing Cash Flow | -91.51M | -67.25M | -16.69M | -183.10M | -99.73M |
Silicon Motion Technical Analysis
Positive
128.37
Price Trends
100.38
Positive
96.52
Positive
82.19
Positive
Market Momentum
6.21
Negative
75.15
Negative
62.25
Neutral
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 128.37 is above the 20-day moving average (MA) of 116.06, above the 50-day MA of 100.38, and above the 200-day MA of 82.19, indicating a bullish trend. The MACD of 6.21 indicates Negative momentum. The RSI at 75.15 is Negative, neither overbought nor oversold. The STOCH value of 62.25 is Neutral, 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 3 New Risks
1.
The restrictions on our ability to solicit or engage in negotiations with respect to other potential acquisition proposals may discourage other potential transactions that may be favorable to our shareholders. Q4, 2022
2.
Some of our directors and officers may have interests that may be different from, or in addition to, the interests of our shareholders. Q4, 2022
3.
Our shareholders could file claims challenging the Merger, which may delay or prevent the closing of the Merger and may cause us to incur substantial defense or settlement costs, or otherwise adversely affect us. Q4, 2022
Silicon Motion Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.36B | 32.95 | 15.25% | 2.22% | -2.26% | 9.74% | |
68 Neutral | $2.61B | 144.12 | 2.53% | 2.27% | 10.50% | -52.00% | |
67 Neutral | $6.68B | -102.21 | -5.97% | ― | 47.10% | 64.29% | |
64 Neutral | $4.21B | 166.23 | 1.22% | ― | -7.49% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $3.42B | ― | -3.16% | ― | 13.24% | -129.14% | |
56 Neutral | $2.62B | -32.27 | -13.92% | ― | 48.08% | 51.23% |
* Technology Sector Average
SIMO
Silicon Motion
128.37
74.49
138.25%
IPGP
IPG Photonics
99.89
29.07
41.05%
POWI
Power Integrations
47.25
-12.39
-20.78%
SLAB
Silicon Laboratories
203.41
56.01
38.00%
SYNA
Synaptics
87.70
12.88
17.21%
AMBA
Ambarella
60.75
-17.89
-22.75%
Silicon Motion Corporate Events
Silicon Motion Posts Strong Q4 2025 Results as New SSD and eMMC/UFS Products Drive Growth
Feb 4, 2026
On February 4, 2026, Silicon Motion reported strong fourth-quarter and full-year 2025 results, highlighted by broad-based product momentum and expanding market share in key storage segments. Fourth-quarter 2025 net sales rose 15% sequentially and 46% year-on-year to $278.5 million, with SSD controller sales up an estimated 25–30% quarter-on-quarter and eMMC/UFS controller sales rising modestly sequentially but more than 50% year-on-year, while SSD solutions revenue more than doubled. GAAP gross margin held just above 49% and operating margin reached 11.4%, with GAAP earnings climbing to $1.41 per diluted ADS and non-GAAP earnings to $1.26. For full-year 2025, revenue grew 10% to $885.6 million, with steady margins and EPS improvement, underpinned by the ramp of new 8‑channel and 4‑channel PCIe 5 client SSD controllers, continued share gains in eMMC/UFS, and early traction in automotive and enterprise, including initial boot-drive shipments to a leading GPU maker. The company also reinforced its shareholder-return profile with a previously announced $2.00 per ADS annual cash dividend, of which $16.7 million was paid on November 26, 2025, signaling confidence in cash generation and longer-term growth prospects.
The most recent analyst rating on (SIMO) stock is a Buy with a $135.00 price target. To see the full list of analyst forecasts on Silicon Motion stock, see the SIMO Stock Forecast page.
Silicon Motion Confirms Next Quarterly Dividend Payment for February 26, 2026
Feb 2, 2026
On February 2, 2026, Silicon Motion Technology Corporation confirmed that it will proceed with the next quarterly installment of its previously declared annual cash dividend of US$2.00 per ADS (US$0.50 per ordinary share), which was authorized by its board on October 27, 2025. The upcoming payment, set at US$0.50 per ADS (US$0.125 per ordinary share), will be distributed on February 26, 2026 to shareholders of record as of February 11, 2026, underscoring the company’s ongoing capital-return commitment while noting that any future dividends remain subject to board discretion and compliance considerations.
The most recent analyst rating on (SIMO) stock is a Buy with a $135.00 price target. To see the full list of analyst forecasts on Silicon Motion stock, see the SIMO Stock Forecast page.
Silicon Motion Sets February 4 Call for Q4 2025 Earnings
Jan 9, 2026
On January 9, 2026, Silicon Motion Technology Corporation announced that it will release its fourth-quarter 2025 financial results after the market closes on February 3, 2026, and will host an earnings conference call on February 4 at 8:00 a.m. Eastern Time, with pre-registration required for participation and a simultaneous webcast on the company’s website. The scheduled disclosure of quarterly earnings and accompanying call signals an upcoming update on the company’s financial performance and operating trends, which will be closely watched by investors and industry stakeholders given Silicon Motion’s prominent position in the global solid-state storage and NAND controller markets.
The most recent analyst rating on (SIMO) stock is a Buy with a $125.00 price target. To see the full list of analyst forecasts on Silicon Motion stock, see the SIMO Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.