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Silicon Motion (SIMO)
NASDAQ:SIMO
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Silicon Motion
(NASDAQ:SIMO)
Rating:70Outperform
Price Target:―
Positive Factors
Financial Position
The company's balance sheet showed a strong net-cash position of US$275 million.
Guidance and Sales
Management provided positive 2Q guidance with expectations of increased sales and stable gross margins.
Market Opportunities
A new NVIDIA related win has been announced, boosting confidence in the company's future performance.
Negative Factors
Consumer Demand
Guidance disappointed due to muted holiday consumer demand in PCs, handsets, and aftermarket SSDs.
Demand Risks
Assumptions indicate potential risk related to US tariff-related demand, impacting sales projections.
Profitability
Operating profit margin was below consensus expectations, indicating pressure on profitability.
Silicon Motion (SIMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.15B
Dividend Yield3.12%
Average Volume (3M)598.41K
Price to Earnings (P/E)22.8
Beta (1Y)1.56
Revenue Growth10.78%
EPS Growth58.82%
CountryUS
Employees1,819
SectorTechnology
Sector Strength77
IndustrySemiconductors
Share Statistics
EPS (TTM)0.60
Shares Outstanding33,681,620
10 Day Avg. Volume724,262
30 Day Avg. Volume598,411
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.15
Price to Sales (P/S)0.00
P/FCF Ratio6.09
Enterprise Value/Market Cap0.08
Enterprise Value/Revenue0.06
Enterprise Value/Gross Profit0.48
Enterprise Value/Ebitda0.36
Forecast
1Y Price Target
$70.50Price Target Upside10.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
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 Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 42.11%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
Silicon Motion reported strong revenue and margin performance, alongside significant design wins, particularly with NVIDIA's BlueField-3 DPU platform. However, challenges such as a sequential revenue decline, increased operating expenses, and geopolitical uncertainties were noted. Despite these challenges, the company's strategic wins and product demand position it well for future growth.Q1-2025 Updates
Positive Updates
Revenue at High End of Range
Silicon Motion delivered revenue at the high end of their range for the first quarter of 2025, indicating strong performance despite market challenges.
Gross Margin Expansion
The company achieved another quarter of gross margin expansion through the introduction of new products and a shift towards higher-end PCIe and UFS products.
Strong Design Win Momentum
Significant progress was made in securing design win momentum and market share gains across all end markets, including a notable win with NVIDIA's BlueField-3 DPU platform.
Increased Demand for PCIe 5 8-channel Controller
The PCIe 5 8-channel controller saw stronger than expected demand, accounting for over 5% of the client SSD business.
UFS and eMMC Product Growth
Strong booking momentum was noted for UFS 3.1, UFS 2.2, and eMMC controllers, positioning the company well in the smartphone and automotive markets.
MonTitan Platform Opportunity
The MonTitan platform presents a large addressable market in enterprise class controllers, with expansion into AI storage solutions and strategic engagement with NVIDIA.
Automotive Market Growth
The company reported improved market position in automotive, with significant design wins expected to contribute to revenue growth.
Negative Updates
Revenue Decline
Revenue decreased by 12.9% sequentially to $166.5 million, reflecting weaker end-user demand for PCs and smartphones at the start of the quarter.
Operating Margin Decrease
Operating margins decreased sequentially to 8.9%, though it was still within the company's guided range.
Geopolitical and Tariff Challenges
The global economic picture is difficult to navigate due to geopolitical challenges and the impact of tariffs, which create uncertainty in demand.
Investment Impact on Operating Expenses
Operating expenses increased to $63.6 million due to investments in new enterprise storage products and new product tape-outs.
Company Guidance
In the first quarter of 2025, Silicon Motion Technology Corporation reported revenue of $166.5 million, marking a sequential decrease of 12.9%, yet reaching the high end of their guidance range. The company's gross margin expanded to 47.1%, attributed to a favorable product mix shift towards newer, higher-margin products. Operating expenses increased to $63.6 million, primarily due to ongoing investments in advanced technology and new product tape-outs, resulting in an operating margin of 8.9%. For the second quarter, the company projects revenue growth of 5% to 10%, equating to $175 million to $183 million, with gross margins anticipated to climb to 47% to 48%, and operating margins expected to be in the range of 8.9% to 10.9%. The company maintains its outlook for a run rate of approximately $1 billion by the end of 2025, driven by new product introductions and increased market demand, particularly in the PCIe 5, UFS 3.1, and enterprise storage segments.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.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 779.96M | 803.55M | 639.14M | 945.92M | 922.10M | 539.52M | Gross Profit |
| 363.75M | 370.90M | 270.39M | 465.83M | 460.80M | 260.16M | EBIT |
| 85.76M | 92.81M | 39.88M | 213.93M | 245.87M | 115.13M | EBITDA |
| 117.00M | 119.60M | 83.04M | 233.25M | 263.03M | 99.33M | Net Income Common Stockholders |
| 94.27M | 90.72M | 52.87M | 172.51M | 200.00M | 79.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 275.14M | 276.07M | 314.30M | 232.18M | 360.08M | 342.96M | Total Assets |
| 991.40M | 1.03B | 1.01B | 961.25M | 971.33M | 742.06M | Total Debt |
| 0.00 | 0.00 | 2.34M | 3.20M | 2.90M | 3.06M | Net Debt |
| -275.14M | -276.07M | -311.96M | -228.97M | -357.18M | -339.90M | Total Liabilities |
| 219.07M | 259.12M | 273.26M | 228.65M | 313.75M | 184.32M | Stockholders Equity |
| 772.33M | 773.75M | 734.70M | 732.60M | 657.58M | 557.74M |
| Cash Flow | Free Cash Flow | ||||
| 74.11M | 32.74M | 98.77M | 50.97M | 150.04M | 97.11M | Operating Cash Flow |
| 119.42M | 77.19M | 149.08M | 83.75M | 176.87M | 115.89M | Investing Cash Flow |
| -45.04M | -44.19M | -49.09M | -32.78M | -30.34M | -20.78M | Financing Cash Flow |
| -91.63M | -67.25M | -16.69M | -183.10M | -99.73M | -73.91M |
Silicon Motion Technical Analysis
Positive
63.58
Price Trends
50.61
Positive
51.97
Positive
54.07
Positive
Market Momentum
4.70
Negative
73.94
Negative
78.69
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 63.58 is above the 20-day moving average (MA) of 57.17, above the 50-day MA of 50.61, and above the 200-day MA of 54.07, indicating a bullish trend. The MACD of 4.70 indicates Negative momentum. The RSI at 73.94 is Negative, neither overbought nor oversold. The STOCH value of 78.69 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.24B | 8.26 | 13.70% | ― | -3.85% | 5.95% | |
80 Outperform | $1.49B | 14.89 | 12.21% | ― | 26.21% | 17.34% | |
77 Outperform | $1.87B | 10.68 | 18.45% | ― | -15.14% | -28.30% | |
73 Outperform | $1.15B | 18.04 | 8.68% | ― | 3.30% | ― | |
70 Outperform | $2.15B | 22.80 | 12.33% | 3.12% | 10.78% | 58.82% | |
70 Neutral | $1.51B | 17.20 | 9.79% | 3.41% | 0.61% | 80.97% | |
61 Neutral | $11.29B | 10.17 | -6.88% | 2.97% | 7.41% | -8.93% |
* Technology Sector Average
Performance Comparison
SIMO
Silicon Motion
63.58
-10.14
-13.75%
ACLS
Axcelis Technologies
59.67
-53.22
-47.14%
HIMX
Himax Technologies
8.62
2.39
38.36%
PLAB
Photronics
20.06
-6.66
-24.93%
VECO
Veeco
19.78
-21.47
-52.05%
ACMR
ACM Research
23.29
0.67
2.96%
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.